Happy Foods and General Grains Both Produce Similar Puffed Rice

Multiple Choice

Happy Foods and General Grains both produce similar puffed rice breakfast cereals. For both companies, the cost of producing a box of cereal is 45 cents, and it is not possible for either company to lower their production costs any further. How can one company achieve a competitive advantage over the other?

A) Increase total perceived consumer benefits through differentiation.
B) Raise prices above the current reservation price.
C) Lower prices to the break-even price.
D) Increase the number of stock market shares available to investors.