When an Entrepreneur Introduces a New Improved Product That Is

question 146

Multiple Choice

When an entrepreneur introduces a new improved product that is highly valued relative to cost

• A) consumers will be worse off.
• B) the demand for the products that are good substitutes for the new product will increase.
• C) some of the existing products will become obsolete and businesses producing those products will fail.
• D) total employment will decline if there are business failures.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders but instead is reinvested in the business or used to pay off debt.

Net Income

Net income is the total earnings of a company after all expenses and taxes have been deducted from total revenue.

Dividends

Payments made to shareholders out of a corporation's earnings.

Shareholders

Owners of shares in a corporation, holding a portion of the company's stock and thus a claim on its assets and earnings.