Companies with lower costs ________.
A) specialize in selling products with value-added features
B) usually market products with inferior quality, thereby justifying the low selling price
C) can set lower prices that result in smaller margins but greater sales and profits
D) tend to overprice products owing to their monopolistic advantage
E) usually set higher prices that result in higher margins

Question

Quizplus · Accepted Answer

Companies with lower costs can set lower prices that attract customers and lead to greater sales and profits despite smaller margins. This can be achieved by efficient production processes, economies of scale or reduced overhead costs. Specialization in value-added features, overpricing or offering inferior quality products are not necessarily linked to lower costs.

Companies with Lower Costs ________