Why Are Decision Trees Useful to Managers Who Plan Business

question 65

Multiple Choice

Why are decision trees useful to managers who plan business strategies?

• A)Decision trees explain the level of concentration in an industry.
• B)Decision trees can be used to increase the amount of product differentiation; this enables managers to charge higher prices for their products.
• C)Decision trees provide a systematic way of thinking through the implications of a strategy.
• D)Using a decision tree always leads to a dominant strategy.

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Definitions:

Special Price

A temporary discounted offer or a negotiated price lower than the usual list price, often used to stimulate demand or reward customers.

Variable Costs

Costs that vary directly with the level of production or the volume of services provided.

Special Order

A one-time order that is not normally part of the company's standard operations.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues.