A Competitive Strategy of Striving to Be the Low-Cost Provider

question 8

Multiple Choice

A competitive strategy of striving to be the low-cost provider is particularly attractive when

• A) buyers are not price sensitive.
• B) the industry is made up of a large number or equal-sized rivals.
• C) there are many ways to achieve product differentiation that have value to buyers.
• D) price competition is especially vigorous,buyers have low switching costs,and the majority of industry sales are made to a few,large volume buyers.
• E) switching costs are high,price competition is strong,and buyers tend to use the industry's products in many different ways.

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Definitions:

Marginal Product

The additional output generated by adding one more unit of a specific input, all other inputs being held constant.

Total Product

The total quantity of output produced by a firm using a given amount of inputs.

Law Of Diminishing Returns

An economic principle stating that adding an additional factor of production results in smaller increases in output.

Study Hours

The amount of time allocated by individuals for learning or educational activities.