Managers are most likely to increase the profitability of their firm by pursuing strategies that: a) Add value to the firm's productsb) Increase costsc) Enable the firm to reduce the depth of its product lined) Allow the firm to sell less products in existing marketse) Allow the firm to exit from relatively new markets

Question

01-08-2019
Business

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Managers are most likely to increase the profitability of their firm by pursuing strategies that: a) Add value to the firm's productsb) Increase costsc) Enable the firm to reduce the depth of its product lined) Allow the firm to sell less products in existing marketse) Allow the firm to exit from relatively new markets

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Nyctalus Nyctalus · Answer 1 · 2019-08-08T12:35:06+02:00

Answer: Option A

Explanation: Profitability refers to the ability of a firm to generate profits with certain resources and within certain time period. If the firm's managers wants to increase the ability of the firm to generate profits they must increase value of the products offered.

If there comes a value addition, customers will find that commodity more useful which will increase its demand leading to higher profitability. Hence option A is correct.