One Way to Get into Business Is to Buy an Existing

question 60

Multiple Choice

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on

• A) the prospects for business competition.
• B) the current owner's retirement plan.
• C) the amount of government contracts the company has.
• D) the value of what the business owns, what it earns, and what makes it unique.

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Definitions:

Oligopolistic

Pertaining to an oligopoly, a market structure with a few firms dominating the industry, leading to limited competition.

Herfindahl-Hirschman Index

A measure of market concentration to assess the level of competition within an industry.

Herfindahl-Hirschman Index

A measure of market concentration, calculated by summing the squares of the market shares of all firms in the industry.

Industry A

Placeholder for a specific sector of the economy, often used as an example in economic contexts.