Question

The concept of competitive advantage focuses on a. what customers are willing to pay. b. the costs a firm incurs in delivering a product and/or service. c. increasing the wedge between what customers are willing to pay and the cost that the firm incurs. d. decreasing the wedge between what customers are willing to pay and the cost that the firm incurs. e. creating an attractive industry.

Answer 1

Answer:

c. increasing the wedge between what customers are willing to pay and the cost that the firm incurs.

Explanation:

Competitive advantage can be defined as conditions, factors or circumstances that allow a business firm (organization) to manufacture finished goods or services better and perhaps cheaper than other (rival) firms in the same industry. Thus, it's responsible for putting a business firm in a superior or more favorable position than rival firms.

This ultimately implies that, a competitive advantage has a significant impact on a business because it increases its level of sales, revenue generation and profit margin when compared to rival firms in the same industry.

Hence, the concept of competitive advantage focuses on increasing the wedge between what customers are willing to pay and the cost that the firm incurs. Generally, customers are willing to pay for a product or service provided they get value for their money and derive enough satisfaction from it.