Sematech Is a Producer of Computer Chips

question 40

Multiple Choice

Sematech is a producer of computer chips. To gain an advantage over other computer chip makers, Sematech focuses on reducing its costs below all of its competitors and has aligned its value chain accordingly. Recently, several of Sematech's competitors have begun to reduce the company's competitive advantage. In response to this threat, Sematech has decided to add production capacity in an effort to lower costs.
-If Sematech's expansion plans did not produce the desired cost savings but the company decided to continue production expansion in an effort to capture cost reductions, this would be an example of

• A) economies of scale.
• B) escalation of commitment.
• C) diseconomies of scale.
• D) managerial diseconomies.

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Definitions:

Economic Interests

The financial stakes or incentives that individuals, groups, or organizations have in policy decisions or economic conditions.

Public Interests

The welfare or well-being of the general public; often considered a guiding principle for governmental policy.

Pluralism Theory

The belief that power is distributed among various groups in society, allowing for a multiplicity of views and interests to coexist.

Lobbyists

Individuals or groups who attempt to influence legislators or government officials on behalf of a specific cause or policy interest.