When a Local Firm Focuses on Leveraging Its Knowledge of Local

question 12

Short Answer

When a local firm focuses on leveraging its knowledge of local tastes and customs as well as good relationships with local distributors and suppliers to compete with large multinational companies,they are said to adopt a(n)____________________ strategy.

---

Definitions:

Substitution Price Elasticity

A measure of how much the quantity demanded of one good responds to a change in the price of another good, indicating the degree to which these goods are substitutes.

Utility Function

A numerical model that explains how a consumer gains pleasure or usefulness from using goods and services.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, holding the consumer's utility level constant.

Income Effect

The alteration in the income of a person or the economy, and its effect on the amount of a product or service that is requested.