Which of the Following Forces Is Commonly Reduced Through the Use

question 4

Multiple Choice

Which of the following forces is commonly reduced through the use of switching costs?

• A) Supplier rivalry
• B) Supplier power
• C) Threat of substitute products or services
• D) Rivalry among existing competitors

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Definitions:

Capital Intensity Ratio

A measure of how much capital is used in production, often expressed as the ratio of total assets to sales revenue.

Full Capacity

The maximum level of production or output that a facility can achieve under normal operating conditions.

Operating Capacity

The maximum output a company can produce under normal working conditions.

Earnings Retention Ratio

The proportion of net income that a company retains to reinvest in its business rather than distributing it to shareholders as dividends.