For a Differentiation Strategy to Be Considered Successful

question 11

Multiple Choice

For a differentiation strategy to be considered successful:

• A)The organization that is pursuing the differentiation must be highly innovative
• B)Customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create that uniqueness
• C)Loss of sales cannot reduce the benefits from economies of scale
• D)The organization must invest heavily in differentiating its products
• E)The organization that is pursuing differentiation must charge approximately the same price as its competitors but make a higher profit

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Definitions:

Demand Function

A mathematical function showing the relationship between the quantity of a good demanded and its price, along with other determinants like consumer's income and prices of related goods.

Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with higher elasticity indicating greater responsiveness.

Gallons

A unit of volume for liquid measure equal to four quarts, used in the US customary and British imperial systems.

Quarts

A unit of liquid volume measurement in the United States, equal to a quarter of a gallon or approximately 0.946 liters.