Etsuro is a management consultant. Baker Corp. asks him to evaluate their company, and he finds that the difference between the cost of producing the firm's products and the value of those products is extremely narrow. What should Etsuro suggest that Baker Corp. management do?
A) Find a way to widen the gap between cost and value.
B) Find a way to pass on as much profit as possible to suppliers and customers.
C) Shore up the company's strong position by erecting entry barriers.
D) Encourage customers to buy complements to their products.

Question

Quizplus · Accepted Answer

Firms create economic value by expanding as much as possible the gap between the value the firm's product or service generates and the cost to produce it.

Etsuro Is a Management Consultant