In Product Modification, Three Conditions Must Be Met to Improve

question 13

Multiple Choice

In product modification, three conditions must be met to improve a firm's product mix: the product must be modifiable, customers must be able to perceive that a modification has been made, and

• A) a modification should make the product more consistent with customers' desires.
• B) competing companies should not be aware of planned product modifications.
• C) a modification should change customers' desires to provide greater satisfaction.
• D) management must perceive the modification as a reasonable and necessary action.
• E) production costs and materials needed should be limited.

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Definitions:

Constant Returns

A situation in production where increasing the quantity of inputs results in a proportional increase in the quantity of outputs, indicating a stable relationship between inputs and outputs.

Scale

refers to the size of a business operation or the capacity of a company's production output.

Production Function

An equation or model that describes the relationship between inputs (like labor and capital) and outputs (goods or services) in the production process.

Capital

Assets or wealth, whether in the form of money or other resources, that are used or invested to generate income.