Two Fatal Flaws Can Render a Business Model Untenable from the Beginning

question 5

Multiple Choice

Two fatal flaws can render a business model untenable from the beginning. These are utterly unsound economics and:

• A) a complete misread of the customer
• B) failure to copy the industry leader's business plan
• C) overemphasis on the importance of feasibility analysis
• D) overemphasis on the importance of industry analysis
• E) failure to complete a business plan prior to developing a business model

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Definitions:

Maximize Profits

The process of adjusting operations and resources to achieve the highest possible profit.

Break-even

The point at which total cost and total revenue are equal, meaning no net loss or gain is incurred by the business.

Profit Per Unit

The amount of money gained from selling one unit of a product, calculated by subtracting the cost per unit from the selling price.

Profit-Maximizing Level

The point at which a company can achieve the highest possible profit, typically determined by analyzing costs and revenue.