If costs rise more quickly than quality,then firm value will:
A)be maximized before total quality is achieved.
B)be minimized before total quality is achieved.
C)be maximized after total quality is achieved.
D)always decline.

Question

Quizplus · Accepted Answer

When costs rise more quickly than quality, it implies diminishing returns on investment in quality improvement. Therefore, the optimal point for maximizing firm value occurs before reaching total quality, as beyond a certain point, the cost of further quality improvements outweighs the benefits.

If Costs Rise More Quickly Than Quality,then Firm Value Will