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:

WACC

The Weighted Average Cost of Capital, a calculation of a firm's cost of capital that weighs each category of capital proportionately.

After Taxes

The net amount remaining following the deduction of all applicable taxes, often used to assess the true profitability of a business activity or investment after federal, state, and other taxes have been considered.

Beta Coefficient

A gauge for assessing the risk or fluctuation level of a security or portfolio in relation to the entire market.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds.