Significant Barriers to Entry Are Not Always Sufficient to Keep

question 12

True/False

Significant barriers to entry are not always sufficient to keep some new firms from entering industries with higher-quality products, lower prices, and substantial marketing resources.

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Definitions:

Machine-Hours

A measure of the total time that machines are operating, often used as a basis for allocating manufacturing overhead costs.

Markup

The amount added to the cost price of goods to cover overhead and profit, resulting in the selling price.

Selling Price

The amount of money charged to the customer for a product or service, determined by adding a margin to the cost price.

Overhead Applied

The allocation of estimated overhead costs to specific jobs or departments based on a predetermined rate or method.