Circuit Corp. is a manufacturer of a broad range of consumer electronics products. These consumer products are all highly profitable. The firm also manufactures a low-cost component which is an essential differentiating feature for most of its consumer products. The costs to manufacture this component have risen sharply in recent months. Internal cost accounting estimates now indicate the company is breaking even on the manufacture of this component. Which of the following is most likely?
a. Circuit will likely continue to manufacture the component, even at a loss, due to low supplier power.
b. Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes.
c. Circuit will likely discontinue manufacture of the component due to low strategic stakes.
d. Circuit will likely discontinue manufacture of the component due to high supplier stakes.
Answer: Circuit will likely continue to manufacture the component, even at a loss, due to high strategic stakes.