Which of the Following Statements Is True of Financing an Entrepreneurial

question 7

Multiple Choice

Which of the following statements is true of financing an entrepreneurial firm?

• A) Microfinance involves lending sums ranging from $600-$1000 to start medium-scale businesses.
• B) Countries that have low venture capital (VC)investment lack sources of informal investment.
• C) Innovative entrepreneurship is usually not financed through formal investment.
• D) Strategic investors demand collateral in return for financing the firm.

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Definitions:

Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to a change in its price.

Efficiency Loss

The loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Demand and Supply

The fundamental concepts of economics that demonstrate how the quantity of goods or services demanded by consumers relates to the quantity supplied by producers at various prices.

Inelastic

Describing a situation where the demand or supply for a product does not significantly change in response to price changes.