Which of the Following Scenarios Is NOT a Reason a Firm

question 130

Multiple Choice

Which of the following scenarios is NOT a reason a firm would eliminate an item within a product line?

• A) The firm decided to refocus marketing efforts elsewhere.
• B) The firm must respond to evolving markets.
• C) The product undermined its own brand.
• D) The product being eliminated is unprofitable.
• E) The firm has decided to capture new markets.

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Definitions:

Fixed Costs

Costs that remain constant regardless of the amount of production or sales, including rent, salaries, and insurance fees.

Breakeven

The point at which total costs and total revenue are equal, resulting in no net loss or gain, and everything earned beyond this point is considered profit.

Selling Price

The amount of money charged for a product or service, or the sum of values that consumers exchange for the benefits of having or using the product or service.

Margin of Safety

A financial metric that measures the difference between actual sales and the break-even point, indicating risk level.