Which of the Following Is Not an Example of a Defensive

question 67

Multiple Choice

Which of the following is not an example of a defensive move to protect a company's market position and restrict a challenger's options for initiating competitive attack?

• A)Granting volume discounts or better financing terms to dealers/distributors and providing discount coupons to buyers to help discourage them from experimenting with other suppliers or brands
• B)Signaling challengers that retaliation is likely in the event they launch an attack
• C)Publicly committing the company to a policy of matching a competitors' terms or prices
• D)Maintaining a war chest of cash and marketable securities
• E)Challenging struggling runner-up firms that are on the verge of going under

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs — direct materials, direct labor, and both variable and fixed manufacturing overhead — in the cost of a product.

Unit Product Cost

The total cost (including direct materials, direct labor, and overhead) divided by the number of units produced, representing the cost to produce a single unit.

Net Operating Income

The income generated from a company's principal operations, calculated after deducting all operational expenses but before interest and taxes.

Break-Even

The point at which total revenues equal total costs, resulting in no profit or loss.