Research Indicates That Companies Undertaking Cost-Cutting Programs

question 22

Multiple Choice

Research indicates that companies undertaking cost-cutting programs

• A) are four times more likely than others to cut costs again.
• B) seldom reduce staff further.
• C) seldom undertake a strategic re-orientation.
• D) overwhelmingly improve financial performance in the long run.
• E) change strategy immediately.

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Definitions:

Variable Cost

A cost that depends on the level of production chosen.

Marginal Revenue

The incremental gain in revenue achieved by a company for selling an additional unit of product or service.

Marginal Cost

The additional cost incurred by producing one more unit of a good or service, a critical concept for economic analysis and decision-making.

Total Revenue

The total amount of money received by a company from the sale of its goods or services before any expenses are subtracted.