Which of the Following Is a Method Firms Can Use

question 19

Multiple Choice

Which of the following is a method firms can use to counteract price fluctuations and eliminate income risk?

• A) Manufacture all needed inputs internally
• B) Acquire upsteam firms in the vertical chain
• C) Enter into futures contracts to hedge the price of raw materials
• D) Eliminate competitors by under-cutting their price
• E) None of the above

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Definitions:

Expert Power

The influence someone has over others due to their specialized knowledge or skills.

Organize Information

The act of arranging data or details in a structured and coherent manner to facilitate better understanding and decision-making.

Personal Reward Power

The ability of an individual to influence others through the provision or withdrawal of rewards.

Social Acceptance

The state or condition of being approved and accepted within a social group or society.