Building Customer Awareness of the Newcomer's Product Is Very Costly

question 83

Multiple Choice

Building customer awareness of the newcomer's product is very costly in the face of which of the following sources of barriers to entry?

• A)economies of scale
• B)technological barriers
• C)government regulations
• D)brand loyalty

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Definitions:

Total Costs

The overall expenditure involved in producing goods or offering services, comprising both stable and changeable costs.

Economies of Scale

The cost advantage achieved when production becomes efficient, as the scale of production increases, leading to a reduction in the average cost to make each unit.

Diseconomies of Scale

A situation where, as a firm becomes larger, its costs per unit increase due to inefficiencies that arise from its growth.

Constant Costs

The costs that remain unchanged as the level of output or production increases or decreases.