Quality Can Improve Profitability by Reducing Costs

question 13

Multiple Choice

Quality can improve profitability by reducing costs. Which of the following statements does not support this argument?

• A) Firms can use flexible pricing to charge lower prices because products cost less to produce, which means greater profits.
• B) Firms with lower rework and scrap costs can charge higher prices for greater profits.
• C) Firms with better quality have increased productivity, which means greater profits and lower costs.
• D) Firms have lower warranty costs because of fewer returns, which means greater profits.

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Definitions:

Cage the Mainspring

A process in mechanical watchmaking that involves restraining the mainspring to prevent it from releasing its energy too quickly.

Disarmament Chamber

A facility or area designated for the dismantling or neutralization of military weapons and munitions.

Discharge Valves

Components in a system that allow for the controlled release of substances (gas, liquid, etc.) from a pressure vessel or system.