Choice Homes,Inc

question 132

Multiple Choice

Choice Homes,Inc.built its reputation by building high-quality new homes,often at prices less than older ones.Choice Homes used mass purchasing power,innovative high-tech communications among employees to coordinate the building process,and other entrepreneurial strategies to hold costs down.Its homes are primarily targeted at first-time homeowners in an effort to get people out of apartments so they can experience the joy of home ownership for the same price as rent.Choice Homes later developed the "Choice Classic" brand name for higher-end homes targeted at wealthier dual-earner couples.The Choice Classic name was designed to capitalize on the reputation of Choice Homes,especially for current Choice home owners who are ready to "move up" to a larger home.Recently,Choice Homes started a third line of homes called "Reflections," which are expensive,custom-designed homes located in exclusive,prestigious neighbourhoods.
-Refer to Choice Homes,Inc.Choice Homes is considering the development of a new category of small homes designed to replace low-income housing in the inner city.What does this strategy represent?

• A) functional modification
• B) a style modification
• C) a product line extension
• D) a product line contraction

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Definitions:

Price of Labor

The compensation workers receive for their contribution to the production process, often synonymous with wage rate.

Economic Profits

The margin by which a firm's total sales exceed its complete set of expenses, both overt and covert.

Labor

Human effort, either physical or mental, used in the production of goods and services.