An Automobile Company Used Its Profits from the Sale of Motorcycles

question 17

Multiple Choice

An automobile company used its profits from the sale of motorcycles to invest in the development of cars. These cars were less expensive but technologically more advanced than those of its competitors. This is an example of ___________.

• A)disintermediation
• B)low-end disruptive innovations
• C)standardization
• D)high-end disruptive innovations

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Definitions:

Break-Even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain.

Sales Dollars

The total revenue generated from selling goods or services, measured in dollars.

Common Fixed Expenses

Expenses that do not change with the volume of production or sales and are shared among different segments or products of a business.

Divisional Segment Margin

The profit or loss generated by a specific division or segment of a business, excluding costs not directly tied to that division.