The Cost Leader in Network Supply in the Telecommunications Market

question 55

Multiple Choice

The cost leader in network supply in the telecommunications market is Huawei, a Chinese firm. Given this information, which of the following could be true?

• A) Firms in the telecommunications market earn supernormal profits.
• B) Huawei is likely to have gained economies of scale by cutting costs.
• C) Other firms in the telecommunications market are likely to compete with Huawei on price.
• D) Huawei is likely to report falling revenues and negative cash flows.

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Definitions:

Pulmonary Semilunar Valve

A valve in the heart located between the right ventricle and the pulmonary artery that prevents backflow of blood into the heart during ventricular relaxation.

Aortic Semilunar Valve

A valve in the heart situated between the left ventricle and the aorta that prevents blood from flowing back into the heart.

Pericardium

The pericardium is the fibrous sac that encloses the heart, providing it protection and the lubrication needed for its movements.

Lubrication

The process or technique of using a lubricant to reduce friction and wear between two surfaces in contact.