When Does a Firm Fall into the Large Competitive Chasm

question 51

Multiple Choice

When does a firm fall into the large competitive chasm between early adopters and early majority?

• A) when it cannot attract technological enthusiasts to try the beta versions of its products
• B) when it creates strong network effects during the growth stage
• C) when it fails to successfully launch a mass-market version of its product
• D) when the early majority create herding effects for its products

---

Definitions:

Marginal Propensity

The tendency of an individual or population to consume or save an extra unit of income.

Lump-Sum Taxes

Taxes that are a fixed amount, not varying with the income or wealth of the taxpayer, and are paid at one time instead of in installments.

Budget Deficit

A situation where a government's expenditures exceed its revenues during a specified period of time, leading to borrowing or debt accumulation.

Discretionary Fiscal Policy

Government policy involving the use of government spending and taxation levels to influence the economy, based on current conditions.