- The firms are pursuing cost leadership strategy and in this strategy advertising is essential. It is considered fixed cost because it is showing the people or shifting their focuses on the products with similar qualities as their competitors’ products but at a lesser price. On the other hand, product-differentiation strategy is based on advertising the unique qualities of the products and their reasonable costs.
- The actions the firms can take to ensure that economies of scale exist are 1- they make sure that the volume of production reach the optimal level where the average cost per unit ...