Suppose Cathy and Lewis Work in a Bakery Making Pies

question 6

Multiple Choice

Suppose Cathy and Lewis work in a bakery making pies and cakes. Suppose it takes Cathy 1.5 hours to make a pie and 1 hour to make a cake, and suppose it takes Lewis 2 hours to make a pie and 1.5 hours to make a cake. What is the opportunity cost to Cathy of making a cake?

• A)2/3 of a pie.
• B)1 pie.
• C)1.5 pies.
• D)1.33 pies.

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Definitions:

Unrelated Diversification

Unrelated diversification is a corporate strategy involving a firm expanding into business activities that are different from its current operations or markets, aiming to reduce risk through diversification.

Differentiation Strategy

A business approach where a company aims to stand out in the market by offering unique products or services, as opposed to competing mainly on price.

Analyzer Strategy

A business approach that balances maintaining current markets and products while seeking opportunities for innovation.

Strategic Alternative

Various options or plans that an organization can pursue to achieve its goals and objectives.