To Compete in the Automobile Market,Tesla Must Make Many Strategic

question 156

Multiple Choice

To compete in the automobile market,Tesla must make many strategic decisions such as whether to introduce a new car model,how to sell and service its cars,and where to advertise.At Tesla's Fremont,California plant,managers must decide on the monthly production quantities of their S and X models.In making this decision,the managers

• A)face no trade-off because the Fremont plant only produces these two models of the many Tesla models produced worldwide.
• B)face a trade-off,because producing more of one model means producing less of the others.
• C)will choose to only produce the quantity of S and X models where marginal cost equals zero.
• D)will always decide on production quantities in which revenues are maximized.

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Definitions:

Ad Valorem Tariff

A customs duty or tax levied on goods, calculated as a percentage of the item's total value.

Quota

A restriction on the number of units of a particular product that can be imported into a country.