A Strategy of Deliberately Slowing Down the Rate of Introduction

question 46

Multiple Choice

A strategy of deliberately slowing down the rate of introduction of new products by well-established and technologically advanced firms is best described as

• A)a good strategy that maximizes economic rents.
• B)a dangerous strategy as it provides opportunities for other firms to introduce new products.
• C)a good strategy because firms only have a limited number of good projects.
• D)a zero-NPV strategy.

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Definitions:

Net Present Value

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project, calculated as the difference between the present value of cash inflows and outflows.

Credit Sale

Transactions where goods or services are sold and payment is received at a later date.

Monthly Interest Rate

The interest rate applied to a loan or credit balance on a monthly basis.

Variable Cost

Expenses that vary in relation to the amount of product or service generated by a company.