The risk of being the lower-cost producer of a product or service is
A) your business will fail more quickly.
B) your business will generate excess cash and will incur higher taxes.
C) your business will have problems keeping up with demand.
D) customers will abandon your business when the competition offers a lower price.

Question

Quizplus · Accepted Answer

The risk of being the lower-cost producer is that customers will abandon your business when the competition offers a lower price. This means that your business will have to continually innovate and improve its cost structure to maintain competitiveness.

The Risk of Being the Lower-Cost Producer of a Product