Switching Costs May

question 78

Multiple Choice

Switching costs may

• A) drive early entrants out of the market.
• B) make it easy for later entrants to win business.
• C) make it difficult for later entrants to win business.
• D) give later entrants a cost advantage over early entrants.

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Definitions:

Sales

The transactions of selling goods or services to customers, often measured over a specific time period like monthly sales.

Cost of Goods Sold

Direct costs attributable to the production of goods sold by a company, including materials and labor costs.

Inventory Purchases

Transactions involving buying products or raw materials for the purpose of resale or production.

Merchandise

Goods that are purchased, stored, and then sold by retailers or wholesalers, typically in the context of inventory for sale.