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:

Gross Profit

The financial metric that represents the difference between sales revenue and the cost of goods sold, before deducting overheads, payroll, taxation, and interest payments.

Profit Center

A branch or division of a company that is treated as a separate entity for the purpose of calculating its profitability.

Profit Center

A division or segment of a company that is directly responsible for generating its own revenue and profit through its activities.

Cost Center

A department or segment of a business that does not directly generate revenue but incurs costs, focusing instead on controlling expenses.