Entrepreneurial Startup Ventures Often Benefit from Using a Differentiated Strategy

question 32

True/False

Entrepreneurial startup ventures often benefit from using a differentiated strategy, which allows them to employ their limited resources more efficiently.

---

Definitions:

Marginal Revenue Product

This is the additional revenue generated from employing one more unit of a factor of production, such as labor.

Total Revenue

The total amount of money received by a company for goods sold or services provided during a certain time period.

Average Revenue Product

The increase in total revenue resulting from employing one more unit of a resource, holding all other factors constant.

Substitution Effect

The alteration in the consumption of goods as a result of changes in their relative prices, leading consumers to substitute more expensive items with cheaper alternatives.