Even Where Imitation Is Possible, a Firm May Gain Advantage

question 177

Multiple Choice

Even where imitation is possible, a firm may gain advantage from being the first to introduce an innovative product because of

• A)long-lasting brand-name recognition.
• B)a time lag between innovation and imitation by rivals.
• C)trade secrets that limit the ability of rivals to exactly imitate the product.
• D)all of the other answers are correct.

Identify different sources of business financing and their characteristics.

Comprehend the process of determining initial capital requirements and the role of pro forma financial statements.

Understand contractual obligations associated with loans, such as covenants and compensating balances.

Understand the concept and importance of the five C's of credit in business financing.

---

Definitions:

Mark-up

The amount added to the cost price of goods to cover overhead and profit, resulting in the selling price.

Sweater

A knitted garment typically with long sleeves, worn over the upper body.

Overhead Expenses

General business expenses not directly attributable to a specific product or service, such as rent, utilities, and administration costs.

Break-even Price

The price at which total costs and total revenue are equal, resulting in no net gain or loss.