Which of the Following DOES NOT Reflect an Example of the Impact

question 31

Multiple Choice

Which of the following DOES NOT reflect an example of the impact a new entrant might have on an industry?

• A) A new entrant might take away market share from existing competitors.
• B) A new entrant might increase production capacity in the industry so that overcapacity results.
• C) A new entrant might force existing firms to learn new ways of doing things.
• D) A new entrant might decrease competitive rivalry.

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Definitions:

Net Profit

The amount of money a company retains after deducting all its expenses, interest, taxes, and costs from its total revenue.

Seasonal/Cyclical Business

A company whose performance or sales are influenced by seasonal trends or economic cycles.

Adequate Cash Flow

The level of cash generation by a business that is sufficient to cover its operational expenses and financial obligations.

Business

The act of engaging in trade, commerce, or activities for profit and growth.