The amount of value a firm creates is measured by the: Select one: a. Difference between its costs of production and the price that it charges for its products. b. Economies of scale they are able to achieve. c. Profitability the firm achieves. d. Difference between its costs of production and the value that consumers perceive in its products.
Question
The amount of value a firm creates is measured by the:
Select one:
a. Difference between its costs of production and the price that it charges for its products.
b. Economies of scale they are able to achieve.
c. Profitability the firm achieves.
d. Difference between its costs of production and the value that consumers perceive in its products.
Solution 1
The correct answer is d. The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products. This is because value is determined by the benefits a customer receives from a product or service relative to its cost. If a customer perceives that the benefits of a product or service exceed its cost, then the firm has created value.
Solution 2
The correct answer is d. The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products. This is because value is determined by the benefits a customer receives from a product or service relative to its cost. If a customer perceives that the benefits of a product or service exceed its cost, then the firm has created value.
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