A ?Rm Can Exploit the Learning Effect By

question 78

Multiple Choice

A ?rm can exploit the learning effect by:

• A) increasing the number of stages in its value chain.
• B) diversifying into unrelated markets.
• C) growing organically and merging with a rival ?rm.
• D) acquiring smaller, ine?cient competitors.

---

Definitions:

Permanent Income Hypothesis

A theory suggesting that a person's consumption at a point in time is determined not just by their current income but by their longer-term income expectations.

Consumer Binge

A period characterized by excessive spending and consumption by consumers.

Bank Credit Cards

Financial instruments issued by banks that allow holders to borrow funds up to a predetermined limit for purchases or cash withdrawals.

Durable Goods

Goods that are designed to last and be used over a long period, such as vehicles, appliances, and furniture.