Question

What Objectives Do Firms Have in Adding New Products, Services, and Processes to Their Offerings?

A. Attract Talented Employees to the Firm: Yes
B. To Lower Production Costs: Yes
C. To Satisfy the Changing Needs of Consumers: Yes
D. All of the above

Answer 1

The objectives of firms adding new products, services, and processes include attracting talent, lowering costs, and meeting consumer needs. Decisions on production and pricing are influenced by market structure and the competitive environment.

Step-by-step explanation:

When firms consider adding new products, services, and processes to their offerings, they have several objectives, which could include attracting talented employees, lowering production costs, and satisfying the changing needs of consumers. Thus, the correct answer to our student's question would be D. All of the above.

Firms must also consider what products to produce, the production process, the output level, the pricing strategy, and the amount of labor to employ. These decisions are based on the production and cost conditions each firm faces and are influenced by the market structure, which is determined by factors such as market power, product similarity, and barriers to entry.

Adding new offerings can lead to a reduction in competition and the provision of better or less expensive products for consumers, ultimately contributing to increased profits for businesses and higher income for employees.