When Evaluating the Potential of Possible Opportunities (Product-Market Strategies), a Marketing

question 219

Multiple Choice

When evaluating the potential of possible opportunities (product-market strategies) , a marketing manager should:

• A) evaluate each opportunity over the life of the project, since short-term losses may hide long-term profitability.
• B) avoid using quantitative criteria because they tend to oversimplify the problem.
• C) look at each opportunity on its own, since there is no good way to compare different plans.
• D) look only at internal resources, since they are controllable.

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Definitions:

Long-Run Minimum Cost

The lowest cost at which a firm can produce any given level of output in the long run when all inputs are variable.

Average Total Cost Curve

A graphical representation of the total cost (fixed plus variable) per unit of output produced, plotted against different levels of output.

Short-Run

A period in which at least one factor of production is fixed, and firms can only partially adjust their output levels.

Long-Run Minimum Cost

The lowest cost at which a firm can produce any given level of output in the long run, when all inputs can be varied.