When the Costs of Supplies Increase in an Industry, the Low-Cost

Multiple Choice

When the costs of supplies increase in an industry, the low-cost leader:

A) may continue competing with rivals on the basis of product features.
B) will lose customers as a result of price increases.
C) will be unable to absorb higher costs because cost-leaders operate on very narrow profit margins.
D) may be the only firm able to pay the higher prices and continue to earn average or above-average returns.