Which of the Following Factors Most Contributes to Small Business

question 6

Multiple Choice

Which of the following factors most contributes to small business failure?

• A) managerial incompetence or inexperience
• B) bad product design
• C) legal problems
• D) time spent raising capital
• E) personnel issues

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Definitions:

Average Total Cost

The sum of all production costs (fixed and variable) divided by the quantity of output produced.

Average Variable Cost

The per unit cost of variable factors of production, calculated by dividing total variable costs by the quantity of output.

Economic Profit

The total revenue of a firm minus its explicit and implicit costs, representing the financial gain exceeding the opportunity cost.

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogenous product.