Due to Its Large Sales Volume and Low Cost Structure

question 34

Multiple Choice

Due to its large sales volume and low cost structure, Quick Serve Mini-Marts enjoys a cost leadership position. Which of the following scenarios might threaten Quick Serve's competitive advantage?

• A) Existing competitors in the mini-mart industry lower their prices to match those of Quick Serve.
• B) Industry suppliers raise their prices.
• C) Competitors engage in an all-out price war.
• D) A new competitor is perceived to provide similar value, but in addition offers innovative self-checkout.

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Definitions:

Undisclosed Principal

A situation in contract law where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party.

Personal Liability

An individual's legal responsibility to satisfy debts or obligations from personal assets, not just those tied to a particular venture or entity.

Scope of Authority

The range or extent of power that an individual or organization legally has to perform actions or make decisions.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in like circumstances.