A Low-Cost Leader Can Translate Its Low-Cost Advantage Over Rivals

Multiple Choice

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

A) cutting its price to levels significantly below the prices of rivals.
B) either using its low-cost edge to underprice competitors and attract price sensitive buyers in large enough numbers to increase total profits or refraining from price-cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold.
C) going all out to use its cost advantage to capture a dominant share of the market.
D) spending heavily on advertising to promote its cost advantage and the fact that it charges the lowest prices in the industry-it can then use this reputation for low prices to build very strong customer loyalty, gain repeat sales year after year, and earn sustained profits over the long-term.
E) outproducing rivals and thus having more units available to sell.