QUESTION Profit growth is measured by: A. dividing the net profits of the firm by total invested capital. B. subtracting the previous year’s gross profit from the current year’s gross profit. C. calculating the difference between the previous year’s profitability and the current year’s profitability. D. the percentage increase in net profits over time. E. […]
QUESTION Which of the following is a primary activity in the operations of a firm? A. Logistics function B. Research and development C. Information systems D. Human resource function E. Company infrastructure ANSWER B
QUESTION As a result of consumer surplus, a firm typically charges a lower price for a good or service than the value placed on it by customers because: A. the value creation results in a corresponding reduction in costs of production. B. it is highly unlikely that the same good or service will be available […]
QUESTION Which of the following is a support activity in the operations of a firm? A. Research and development B. Customer service C. Marketing and sales D. Creation and maintenance of information systems E. Production ANSWER D
QUESTION One of the reasons why a firm typically charges for a good or service less than the value placed on that good or service by the customer is because: A. the firm attempts to create value for the consumers by providing them a wide range of products. B. it is normally impossible to segment […]
QUESTION Of all the value creation activities in a firm, which of the following creates value by discovering consumer needs and communicating them back to the R&D function of the company, which can then design products that better match those needs? A. Production B. Marketing and sales C. Human resources D. Logistics E. Information systems […]
QUESTION The price that reflects an individual’s assessment of the value of a product is referred to as: A. the market price. B. the customer’s negotiated price. C. the base value of the product. D. the customer’s reservation price. E. the profit growth price. ANSWER D
QUESTION Which of the following of a firm is measured by the difference between the value of a product to an average consumer and the average unit cost of producing that product? A. Customer surplus B. Value creation C. Cost curve D. Value efficiency E. Customer reservation ANSWER B
QUESTION The value of a product to an average consumer is V, the average price that the firm can charge a consumer for that product is P, and the average unit cost of producing that product is C. For this scenario, which of the following is true? A. The firm makes a profit so long […]
QUESTION According to Michael Porter, what are the two basic strategies for creating value and attaining a competitive advantage in an industry? A. Differentiation and low-cost B. Value creation and generalization C. One-size-fits-all and zero-sum D. Comparison and standardization E. Profitability and strategic fit ANSWER A
