Which of the following conditions would enable higher market share to produce higher profits?
A) when unit costs drop as market share increases
B) when unit costs increase as market share increases
C) when production volume drops as market share increases
D) when production volume remains unaltered as market share increases
E) when the company fails to break even

Question

Quizplus · Accepted Answer

When unit costs drop as market share increases, the company can lower its prices and still maintain profit margins. This results in increased demand and further growth of market share, which can lead to even lower unit costs and higher profits.

Which of the Following Conditions Would Enable Higher Market Share