Question

Which of the following factors increases pressures for cost reductions? a. Meaningful differentiation between products b. Reduced international competition c. Persistent excess capacity d. High switching costs e. Competitors that are based in high-cost locations

Answer 1

Answer:

c. Persistent excess capacity

Explanation:

Cost reduction is a process of reducing expenditure in a planned manner. The process of cost reduction requires continuity of cost analysis. The elements which are not of any use or contribute anything to the factors of the production are eliminated through this process. The elements of cost are examined critically before their elimination.