PLEASE COMPLETE ALL THE QUESTIONS TRUE OR FALSE 6. Experience effects and econom

Question

PLEASE COMPLETE ALL THE QUESTIONS

TRUE OR FALSE

6. Experience effects and economies of scale both contribute to reduced costs per unit. Answer: ______

7. In differentiation strategies, the emphasis is on creating value through uniqueness. Answer: ______

8. A best cost strategy combines the elements of low-cost leadership and differentiation. Answer: ______

9. The industry life cycle portrays how sales volume for a class of products changes over its lifetime. Answer: ______

10. A competitive shakeout usually occurs at the beginning of the growth stage of the product life cycle. Answer: ______

Explanation / Answer

6. Experience effects and economies of scale both contribute to reduced costs per unit. Answer: TRUE

The effect of economies of scale is to reduce the average (unit) costs of production .

The production of any good or service shows the experience curve effect. Each time cumulative volume doubles, value added costs fall by a constant percentage.

7. In differentiation strategies, the emphasis is on creating value through uniqueness. Answer: TRUE

In differentiation strategies, the emphasis is on creating value through uniqueness, as opposed to lowest cost.

8. A best cost strategy combines the elements of low-cost leadership and differentiation. Answer: TRUE

A best cost strategy involves a combination of low-cost leadership and differentiation. This is the essence of a best cost strategy—finding a level of differentiation that will bring a premium price while doing so at a reasonable cost.

9. The industry life cycle portrays how sales volume for a class of products changes over its lifetime. Answer: TRUE

The growth of an industry's sales over time is used to chart the life cycle. The distinct stages of an industry life cycle are: introduction, growth, maturity, and decline. Sales typically begin slowly at the introduction phase, then take off rapidly during the growth phase.

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