When the Costs of Supplies Increase in an Industry, the Low-Cost

question 99

Multiple Choice

When the costs of supplies increase in an industry, the low-cost leader:

• A) may continue competing with rivals on the basis of product features.
• B) will lose customers as a result of price increases.
• C) will be unable to absorb higher costs because cost-leaders operate on very narrow profit margins.
• D) may be the only firm able to pay the higher prices and continue to earn average or above-average returns.

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Definitions:

Past Debts

Obligations or amounts of money owed that were incurred in the past.

RUPA

Stands for the Revised Uniform Partnership Act, governing the operation of partnerships in the United States.

Termination

The act of ending something, such as a contract, employment, or agreement.

Heated Disagreement

An intense argument or conflict between individuals or groups.