Which of the Following Statements Is True of Strategic Alliances

question 62

Multiple Choice

Which of the following statements is true of strategic alliances?

• A) The fixed costs and associated risks of developing new products or processes are borne by the alliance partner.
• B) They are a way to bring together complementary skills and assets that both companies develop.
• C) They limit the entry of firms into foreign markets.
• D) A firm risks giving away technological know-how and market access to its alliance partner.

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are similar but slightly differentiated, allowing them some control over pricing.

Maximizing Profits

The process of adjusting production and sales strategies to generate the highest possible profit from business activities.

Economic Profit

The gap measured between comprehensive earnings and widespread costs, including both evident and implicit fees.

Fixed Costs

Costs that do not change with the level of output produced by a firm, such as rent, salaries, and insurance.