Which of the Following Could Form a Barrier to Entry

question 9

Multiple Choice

Which of the following could form a barrier to entry in a market?

• A) Normal economic profits.
• B) Diseconomies of scale.
• C) Relatively elastic demand for the good.
• D) High sunk costs.

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Definitions:

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Indirect Method

A method of reporting cash flows from operating activities where net income is adjusted for changes in balance sheet accounts to arrive at cash provided by or used in operating activities.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue, indicating the actual profit earned.

Adjusting

The act of making entries to update the financial statements to more accurately reflect revenues and expenses for a specific reporting period.