In Order to Take Advantage of Being a First Mover

question 32

True/False

In order to take advantage of being a first mover in an industry, a new entrant must decide on whether to try to do it alone, enter into a strategic alliance, or license its technology.

---

Definitions:

Fixed Costs

Expenses that do not vary with the level of output or sales, such as rent, salaries, and insurance.

Marginal Costs

The hike in total financial outlay required for the fabrication of one additional unit of a product or service.

Variable Costs

Costs that change in proportion to the level of production or business activity, such as raw materials and direct labor expenses.

Average Total Cost

The total cost of production divided by the quantity of output produced.