In an industry where the primary basis of competition is quantity,firms may invest heavily in,say,manufacturing capacity,even if those investments do not generate positive economic profits directly.Sending this kind of a signal is called ________.
A)"puppy-dog-play"
B)"fat-cat effect"
C)"top-dog strategy"
D)"lean-and-hungry look"

Question

Quizplus · Accepted Answer

The strategy described in the statement is known as the "top-dog strategy". This strategy involves investing in excess capacity or other costly signals to convey to competitors that a firm is committed to being the market leader and has the resources to maintain that position. This can deter other firms from entering the market or engaging in price wars, allowing the top-dog firm to maintain its dominant position and potentially earn greater profits in the long run.

In an Industry Where the Primary Basis of Competition Is