A Low-Cost Leader Can Translate Its Low-Cost Advantage Over Rivals

question 43

Multiple Choice

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

• A)underpricing rivals and attracting quality-sensitive buyers in great enough numbers.
• B)maintaining the present price and using the lower-cost edge to earn a higher profit margin on each unit sold.
• C)going all out to use its cost advantage to capture a dominant share of the market.
• D)spending heavily on advertising to promote its cost advantage to build strong customer loyalty.
• E)outproducing rivals and thus having more available units for sale.

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Definitions:

Shock Plate

A device typically used in experimental research to deliver a shock to an animal subject as a form of aversive stimulus.

Obeyed

The action of following the commands, restrictions, or wishes of someone or something with authority.

Milgram Shock Experiment

An experimental social psychology study by Stanley Milgram measuring the willingness of study participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience.

Obedience Levels

The degree to which individuals follow orders or directions from authorities.