Choices that firms make about the kinds of products and services they will sell that impact their relative cost position are known as

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Policy choices made by firms can have a significant impact on their cost position. For example, a firm that chooses to offer high-end, premium products may be able to charge more, but will likely face higher production costs due to the use of higher quality materials and more advanced technologies. On the other hand, a firm that chooses to focus on low-cost, basic products may be able to achieve economies of scale and lower production costs, but may also face competition from other low-cost providers. Ultimately, the strategic choices made by a firm regarding its product and service offerings will play a critical role in determining its relative cost position in the market.

Choices That Firms Make About the Kinds of Products and Services