Which of the Following Is a Benefit of Innovation in an Industry

question 19

Multiple Choice

Which of the following is a benefit of innovation in an industry?

• A) It allows smaller companies the ability to compete with large, established companies by reducing entry barriers and lowering fixed costs of production.
• B) It breaks the life cycle pattern and causes growth so rapid it causes stages to be skipped altogether.
• C) It emphasizes the importance of industry structure.
• D) It secures the profitability of strategic groups within an industry.
• E) It increases the barriers to entry to reduce rivalry and competition.

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Definitions:

Rate Difference

The disparity in interest rates, often used in the context of comparing rates between two different financial products or within different markets.

Spread

The difference between the bid and the ask price of a security or the difference between the interest rate paid for deposits and received for loans.

Institutional Investors

Organizations such as banks, insurance companies, and pension funds that make substantial investments on the capital markets.

Major Exchanges

The leading stock exchanges worldwide, such as the New York Stock Exchange and the Nasdaq, where securities are bought and sold.