A Low-Cost Leader Can Translate Its Low-Cost Advantage Over Rivals

question 54

Multiple Choice

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

• A) cutting its price to levels significantly below the prices of rivals.
• B) using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a higher profit margin on each unit sold.
• C) going all out to use its cost advantage to capture a dominant share of the market.
• D) spending heavily on advertising to promote the fact that it charges the lowest prices in the industry.
• E) outproducing rivals and thus having more units available to sell.

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