Which of the Following Is True of First Movers

question 20

Multiple Choice

Which of the following is true of first movers?

• A) The first mover cannot be able to establish brand loyalty.
• B) The first mover has no opportunity to exploit network effects and positive feedback loops.
• C) The first mover cannot create switching costs for its customers to deter rivals.
• D) The first mover that creates a revolutionary product is in a monopoly position.
• E) Being a first mover guarantees instant success.

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Definitions:

Activity Levels

Refers to the quantity of work performed or production completed in a business within a specific period.

Target Sales Volume

The specific quantity of products a company aims to sell within a certain period to achieve its sales objectives and ensure profitability.

Fixed Costs

Expenses that remain constant regardless of how much is produced or sold, including items like rent, salaries, and insurance.

Unit Contribution Margin

The difference between the selling price per unit and the variable costs per unit, which contributes towards covering fixed costs and generating profit.