A Strategic Precommitment Occurs When a Firm

question 52

Multiple Choice

A strategic precommitment occurs when a firm

• A) Commits to some actions before rivals take theirs, with the aim of increasing its future competitive profit
• B) Commits to some actions after rivals take theirs, with the aim of increasing its future competitive profit
• C) Commits to some actions before rivals take theirs purely by accident
• D) Commits to some actions after rivals take theirs because there are no other options

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Definitions:

Trade Deficit

An economic measure of a negative balance of trade where a country's imports exceed its exports.

Trade Surplus

A situation where the value of a country's exports exceeds the value of its imports, indicating a positive balance of trade.

Net Exports

The difference between a country’s total exports of goods and services and its total imports of them. Positive net exports indicate a trade surplus, while negative net exports indicate a trade deficit.

Chinese Currency

The official currency of China, known as the Renminbi (RMB) or commonly referred to as the Yuan (CNY).