Sometimes an Old Company in an Industry Can Build a Larger

question 8

Multiple Choice

Sometimes an old company in an industry can build a larger plant that has lower costs per unit than a potential entrant (newcomer) can duplicate. That is market:

• A) weakness based on cost.
• B) power based on scale economies.
• C) power based on specific assets.
• D) weakness based on reputation deficiency.

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Definitions:

Cash

Liquid assets held by a company or an individual, used for the purpose of transactions or as a means to settle debts.

Intangible Assets

Intangible assets are non-physical assets owned by a company that have a useful life and provide future economic benefits, such as patents, trademarks, and goodwill.

Physical Form

Physical form refers to the tangible appearance or structure of an item, indicating its material composition and physical characteristics.

Long-term

Pertains to assets, liabilities, investments, or obligations that are expected to be resolved or realized beyond one year.