A Firm That Successfully Differentiates Its Product or Lowers Its

question 228

Multiple Choice

A firm that successfully differentiates its product or lowers its average cost of production creates

• A)value for its customers.
• B)entry barriers into its market.
• C)a perfectly inelastic demand curve for its product.
• D)economies of scale.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an equal annual amount.

Net Working Capital

The difference between a company's current assets and current liabilities.

Variable Costs

Expenses that change in proportion to the activity of a business such as costs for raw material which increase as production increases.