A Predictive Study Showed That a Company Would Gain a 10

question 46

Multiple Choice

A predictive study showed that a company would gain a 10% market share if it reduced its product price by $5.The study assumed competitors would keep the prices of their products unchanged.

• A) This study can be used in all situations.
• B) The company should reduce its product price by $5.
• C) As the company cannot control the price decisions of its competitors so the study is not very useful.
• D) A new study focusing on a smaller number of variables is required.
• E) Market fluctuations make this study important for prediction.

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Definitions:

Balance Sheet

An account that outlines the assets, liabilities, and equity of shareholders of a company on a particular date.

Job Order Cost Accounting Systems

An accounting system that accumulates costs individually for each job. It is used when products are made based on specific orders.

Company's Efficiency

A measure of how effectively a company uses its resources to produce outputs, often assessed through ratios such as revenue per employee or output per hour.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities and resources that go into producing them.