When a Company Is Concerned That the Higher Price It

question 6

Multiple Choice

When a company is concerned that the higher price it charges for its higher quality is too far above the price of the competition,the company is likely addressing a risk of following which competitive strategy?

• A) cost leadership
• B) focus
• C) stuck-in-the-middle
• D) differentiation
• E) competitive scope

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Definitions:

Increase Revenue

Strategies or actions that lead to a rise in the total amount of money received by a company for goods sold or services provided.

AVC

The average variable cost, which is the total variable costs divided by the quantity of output produced.

Perfectly Competitive Firms

Businesses operating in a market where no single firm can influence the market price or product quality, leading to optimal efficiency.

Maximize Profit

The process or strategy employed by businesses to increase their net earnings or reduce costs to the greatest extent possible.