Incumbents Are Unaffected by Fixed Costs of Entry While Potential

question 64

Multiple Choice

Incumbents are unaffected by fixed costs of entry while potential entrants are affected by them because

• A) for potential entrants the cost is avoidable, while for the incumbent, it is not.
• B) fixed costs will be greater for the potential entrant than for the incumbent.
• C) fixed costs are zero for the incumbent.
• D) incumbents will act to prevent entry at all costs.

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Definitions:

Inventions

Unique or novel devices, methods, or processes that result from study and experimentation.

Schemes

In cognitive development, structured patterns of thought or behavior that individuals use to make sense of their experiences, often evolving with new information.

Cognition

The mental action or process of acquiring knowledge and understanding through thought, experience, and the senses, encompassing processes such as memory, judgment, and problem-solving.

Reflexes

Involuntary responses or actions that are automatic and occur without conscious thought in reaction to specific stimuli.