During Market Testing, Elixir Cosmetics (EC)realized That the Cosmetics Industry

question 2

Multiple Choice

During market testing, Elixir Cosmetics (EC) realized that the cosmetics industry was dominated with multiple, well-established brands.These brands mostly sold their products in exclusive outlets and departmental stores.A new entrant like EC would require a different business model to be successful.Thus, EC started selling its products through direct marketing.In this scenario, Elixir Cosmetics accomplished substitution primarily through _____.

• A) path dependence
• B) technology transfer
• C) knowledge diffusion
• D) strategic equivalence

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Definitions:

Average Total Cost

The total cost of production divided by the total quantity produced, including both fixed and variable costs.

Pure Monopolist

A single seller in a market that sells a unique product with no close substitutes, controlling the market price.

Underallocates Resources

A situation where resources are not distributed efficiently, leading to potential waste and underproduction.

Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded by consumers at various prices.