Thomas Has Developed a New Social Media Site That He

question 61

Multiple Choice

Thomas has developed a new social media site that he feels can compete heavily with Facebook.Unfortunately,he cannot find someone to lend him enough money to market his product to consumers.Thomas is facing which kind of barrier to entry?

• A) control of resources
• B) problems raising capital
• C) economies of scale
• D) licensing
• E) patents and copyright law

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Business Strategy

It's a plan of action designed by business leaders to achieve competitive advantage and successfully compete in the market.

Average Total Cost

The total cost of production divided by the number of units produced, indicating the average cost per unit of output.

Competitive Market

An economic scenario where numerous producers and consumers interact, ensuring prices are determined by supply and demand forces without significant influence by any single participant.