Business chapter 43

Why might a business lose sales if it charges a significantly higher price than its rivals?

• Customers are forced to buy from them

• Consumers can easily switch to another supplier

• It increases brand loyalty

• Higher prices always mean better quality

How can businesses justify charging higher prices?

• By differentiating their product and increasing perceived value

• By reducing customer service

• By limiting production

• By ignoring competitors

Why do highly competitive markets result in lower profits?

• Profit must be shared among more competitors

• Businesses do not focus on profit

• Higher sales always lead to lower profits

• Competitors set unreasonably low prices

How can businesses increase profit despite competition?

• By operating more efficiently and reducing costs

• By increasing advertising only

• By avoiding customer engagement

• By refusing to adjust prices

Why is communication with customers essential for business survival?

• It allows businesses to ignore competition

• It helps businesses understand and meet customer needs

• It increases production costs

• It eliminates the need for marketing

Which of the following is an effective way for businesses to communicate with customers?

• Avoiding feedback

• Using social media and market research

• Decreasing customer service

• Raising prices

Why is innovation important for businesses?

• Customers prefer unique and new products

• It reduces operational efficiency

• It decreases market competition

• It always leads to higher costs

How can businesses gain a competitive advantage through innovation?

• By designing unique products and developing a USP

• By copying competitors

• By avoiding product development

• By reducing production costs only

How does business size affect pricing strategy?

• Large businesses dominate pricing in well-established markets

• Small businesses have full control over pricing

• All businesses can set any price freely

• Size has no impact on pricing

Why do small businesses struggle with profitability in large markets?

• They lack competition

• They have a smaller market share and higher costs

• They control the entire market

• They operate on a larger scale