A Broad Differentiation Strategy Improves Profitability When

question 84

Multiple Choice

A broad differentiation strategy improves profitability when

• A) it is focused on product innovation.
• B) differentiating enhances product performance.
• C) the differentiating features appeal to sophisticated and prestigious buyers.
• D) the extra price the product commands exceeds the added costs of achieving the differentiation.
• E) the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

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Definitions:

Tax Impact

The effect that taxation has on individual or corporate financial conditions.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in its price.

Elastic Supply

A situation where the quantity supplied of a good changes significantly as the price changes.

Tax Burden

The total amount of tax that individuals, businesses, or other entities must pay to authorities, often expressed as a percentage of income or revenue.