Question

The minimum concession acceptable by a party in a negotiation is called the _______point.

(a) resistance
(b) Termination
(c) preference
(d) end
(e) break-even

Answer 1

The minimum concession acceptable by a party in a negotiation is known as the break-even point. This is the least favorable point at which a party will agree to a deal, ensuring no loss is incurred. In economics, it also refers to the level of output where a company neither makes a profit nor a loss.

Step-by-step explanation:

The term you are looking for is break-even point. In negotiations, particularly in business contexts, this term refers to the minimum outcome a party is willing to accept without making a loss. While in economics, the break-even point is a level of output at which a company's revenue is equal to its total costs, resulting in zero economic profit. In negotiating terms, reaching a break-even point means the negotiation outcomes cover all of one's costs or minimum expectations, ensuring that there is no loss involved in agreeing to a deal.

This concept is similarly applied in other areas such as consumer behavior, where a consumer equilibrium is reached when the consumer gains the most satisfaction for their budget, aligning the ratio of prices to the ratio of marginal utilities. In the context of long-run economic performance, this concept also touches upon industry dynamics where entry and exit of firms are determined by the ability to at least break even in the long term.

Answer 2

The minimum concession acceptable by a party in a negotiation is called the resistance point. It is different from the break-even point, which describes an economic scenario of zero economic profits.

Step-by-step explanation:

The minimum concession acceptable by a party in a negotiation is called the resistance point. This term describes the least favorable deal that a negotiator would accept before walking away from the negotiation table. It is crucial in establishing the bottom line and helping negotiators understand at what point they should no longer continue the negotiation. The resistance point is often kept private and not disclosed to the opposing party to maintain a stronger position during negotiations.

In economic terms, we may consider concepts such as the break-even point, which is a level of output where the marginal cost curve intersects the average cost curve at the minimum point of AC, leading to zero economic profits. While this term is economically significant, it does not represent the minimum concession in a negotiation setting.

Understanding one's resistance point alongside strategies for entry and exit in markets is an essential aspect of strategic decision-making both in negotiations and in managing business operations to ensure long-run equilibrium.