An Advantage of Being a First Mover Is That

question 34

Multiple Choice

An advantage of being a first mover is that:

• A) the pioneering costs are minimal.
• B) there are well-defined distribution channels.
• C) there is no risk of building the wrong resources.
• D) the focus is always on the mass market.
• E) there is an opportunity to increase sales volume ahead of rivals.

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Definitions:

Marginal Costs

The additional cost incurred in producing one more unit of a good or service.

Average Revenue

The amount of income generated per unit of output, calculated by dividing total revenue by the number of units sold.

Average Total Costs

The total costs of production (fixed and variable costs) divided by the number of units produced, showing the cost per unit.

Pure Monopoly

A market structure in which a single seller controls the entire supply of a product or service, and therefore can manipulate prices and conditions of sale.