Differentiated Defenders Cannot Adhere to a Policy of Low Competitive

question 61

Multiple Choice

Differentiated defenders cannot adhere to a policy of low competitive prices because:

• A)of higher costs involved in differentiating a business's products.
• B)lowering the price would affect the brand image.
• C)it always has a very small market.
• D)of the lower service quality relative to competitors.

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Definitions:

Functional Currency

The currency of the primary economic environment in which the company predominantly generates and expends cash.

Historical Rates

Exchange rates used for the conversion of items on the financial statements that have remained unchanged from past to present.

Foreign Subsidiary

A company owned or controlled by another company, the parent company, that is based in a different country than the subsidiary.

Functional Currency

The functional currency is the main currency used by a business or economic entity, reflecting the primary economic environment in which it operates.