Virtual Merchants Face Potentially Large Costs for All of the Following

question 46

Multiple Choice

Virtual merchants face potentially large costs for all of the following except:

• A)building and maintaining a Web site.
• B)building and maintaining physical stores.
• C)building an order fulfillment infrastructure.
• D)developing a brand name.

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Definitions:

Diversification

The strategy of allocating investments or resources among various financial instruments, industries, or other categories to reduce risk.

Economic Losses

Financial shortfalls that occur when a firm's total costs surpass its total revenues, leading to a negative profit margin.

Positively Correlated

Describes a relationship between events such that each event is more likely to occur if the other event also occurs.

Diversification

Diversification is an investment strategy that involves spreading investments across various assets to reduce risk and increase the potential for returns.