39. Profit growth is measured by:
40. Managers are most likely to increase the profitability of their firm by pursuing strategies
that:
41. The amount of value a firm creates is measured by:
42. In general, the more value customers place on a firm’s products:
43. Typically, the price a firm charges for a good or service is:
44. The price a firm charges for a good or service is typically less than the value placed on
that good or service by the customer. This is because the consumer captures some of that value
in the form of what economists call a _____.
45. As a result of consumer surplus, a firm typically charges less price for a good or service
than the value placed on it by customers because:
46. One of the reasons why a firm typically charges for a good or service less than the value
placed on that good or service by the customer is because:
47. The price that reflects an individual’s assessment of the value of a product is referred to
as:
48. The value of a product to an average consumer is V, the average price that the firm can
charge a consumer for that product is P, and the average unit cost of producing that product is C.
For this scenario, which of the following is true?
49. The _____ of a firm is measured by the difference between the value of a product to an
average consumer and the average unit cost of producing that product.
50. A company can create more value for a product by:
51. A strategy that focuses primarily on increasing the attractiveness of a product is referred
to as a _____ strategy.
52. According to Michael Porter, _____ and _____ are the two basic strategies for improving
creating value and attaining a competitive advantage in an industry.
53. According to Michael Porter, superior portability goes to a firm that:
54. Superior value creation relative to rivals requires that the firm:
55. The _____ shows all of the different positions that a firm can adopt with regard to value
creation and low cost assuming that its internal operations are configured adequately to support
a particular position.
56. The efficiency frontier has a convex shape because of:
57. Which of the following statements is true of the efficiency frontier?
58. For a firm to maximize its profitability, it is necessary that it: