Focused Strategies Keyed Either to Low Cost or Differentiation Are

question 4

Multiple Choice

Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where

• A)the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.
• B)most other rival firms are using a best-cost producer strategy.
• C)buyers have strong bargaining power and entry barriers are low.
• D)most industry rivals have weakly differentiated products.
• E)most industry participants are also using a focused differentiation strategy.

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Definitions:

Opportunity Cost

Sacrificing the chance to gain from other alternatives by committing to one choice.

Real Interest Rate

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to lenders or investors.

Equilibrium Interest Rate

The interest rate at which the demand for funds (borrowing) equals the supply of funds (saving), resulting in a stable market condition.

Money Demand

The desire to hold cash or liquid assets based on the trade-off between the liquidity provided by holding money and the foregone interest earnings from not investing it.