In order for a cost leadership strategy to earn the firm above-average returns, the firm must sell large volumes of the product.

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Cost leadership strategy aims to reduce the cost of production and selling the product at a lower price than competitors. In order to earn above-average returns, the firm must sell large volumes of the product to compensate for the lower profit margins. High volume sales can help to create economies of scale and further reduce the cost of production, making it easier to maintain a cost advantage over competitors.

In Order for a Cost Leadership Strategy to Earn the Firm