A Competitive Strategy to Be the Low-Cost Provider in an Industry

question 85

Multiple Choice

A competitive strategy to be the low-cost provider in an industry works well when

• A)price competition among rival sellers is especially sluggish.
• B)there are numerous ways to achieve product differentiation that have no value to buyers.
• C)buyers incur high costs in switching their purchases from one seller/brand to another.
• D)industry newcomers use introductory low prices to attract buyers and build a customer base.
• E)industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.

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Definitions:

Profit

The financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes associated with the activity.

Loss

An accounting term that represents the excess of expenses over revenues in a specific period, leading to a decrease in equity.

Disaggregation

Disaggregation involves breaking down financial information or data into smaller, more detailed components, often for analytical purposes.

Operating Profit

Earnings before interest and tax (EBIT), indicating the profit a company makes from its normal business operations.