Which of the Following Is an Example of a Barrier

question 47

Multiple Choice

Which of the following is an example of a barrier to entry?

• A)Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup.
• B)Mark charges a lower price to students than to faculty for his tattoo services.
• C)Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring.
• D)John obtained a copyright for the song he wrote and recorded.

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Definitions:

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Certainty Equivalent NPV

A method of valuing risky projects or investments by adjusting the expected cash flows to reflect the investor's risk aversion, providing a 'risk-free' net present value.

Cost of Capital

The minimum return on investment a business necessitates to uphold its market value and entice financial inflow.

Certainty Equivalent NPV

A method used to adjust the net present value (NPV) of an investment to account for risk, equating it to a certain but lower cash flow.