In Which of the Following Circumstances Is a Strategy to Be

question 61

Multiple Choice

In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation?

• A) When the offerings of rival firms are essentially identical, standardized, commodity-like products
• B) When there are few ways to achieve differentiation that have value to buyers
• C) When price competition is especially vigorous
• D) When buyers have widely varying needs and special requirements and the prices of substitute products are relatively high
• E) When entry barriers are low and there is a stream of newcomers to the industry

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Definitions:

Market Price

The present cost at which one can buy or sell an item or service in a competitive market environment.

Perfectly Elastic

A situation where the demand or supply responds infinitely to changes in price, resulting in a horizontal demand or supply curve.

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change in response to price changes; the demand or supply curve is perfectly vertical.

Relatively Elastic

Describes a situation where a small change in price leads to a significant change in quantity demanded or supplied.