Which of the following statements is true?
A) Differentiation and cost structure decisions affect one another.
B) Differentiation and cost structure decisions do not affect one another.
C) Differentiation and cost structure decisions have little effect on a company's profitability.
D) Differentiation decisions do not affect a company's profitability.
E) Cost structure decisions do not affect a company's profitability.

Question

Quizplus · Accepted Answer

Differentiation and cost structure decisions are interrelated. If a company chooses to differentiate its products, it may need to incur additional costs. On the other hand, if it aims to reduce costs, it may have to compromise on product differentiation. Therefore, the choice of differentiation and cost structure decisions can significantly impact a company's profitability.

Which of the Following Statements Is True