With Regard to the Process of Screening Possible Ideas for a New

question 107

Multiple Choice

With regard to the process of screening possible ideas for a new idea, which of the following is correct?

• A) Determining whether or not the new idea adds value for customers is not essential at this early stage of the process.
• B) It is not possible to determine at this early stage whether a new idea will actually give a company a sustained competitive advantage.
• C) It is important to determine if sales will lead to profits.
• D) If the idea is not expected to result in making a profit for a number of years, exit costs are low.
• E) All of these are correct.

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Definitions:

VMPL Curve

The VMPL curve, or the Value of Marginal Product of Labor curve, represents the additional value created by employing one more unit of labor, holding other inputs constant.

Market Wage Rate

The prevailing rate of pay for a specific job in the competitive labor market, determined by supply and demand for labor.

Labor

The human effort, including physical and mental exertion, used in the production of goods and services.

Marginal Product

Marginal product refers to the increase in output that results from employing one more unit of a particular input while keeping other inputs constant.