A Firm That Acquires a Substitute Product Can Try and Reduce

question 29

Multiple Choice

A firm that acquires a substitute product can try and reduce inter-product cannibalization by

• A)Doing nothing
• B)Repositioning its product or the substitute so that they do not directly compete with each other
• C)Pricing each product at the same level
• D)Raising prices on the low-margin products

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Definitions:

Acquisition

The process of obtaining control of another company, either through purchase or merger.

Dividend Income

Income received from owning shares in a company, typically distributed from the company's earnings.

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, with terms specifying interest payments and the return of principal at maturity.

Par Value

The nominal or face value of a security or stock, which is stated in the corporate charter.