Entrenched Companies May Have Cost Advantages Not Available to Potential

question 13

Multiple Choice

Entrenched companies may have cost advantages not available to potential rivals.This is an example of:

• A) Capital requirements
• B) Cost disadvantage independent of size
• C) Economies of scale
• D) Government policy

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Definitions:

Public Good

A product that is non-excludable and non-rivalrous in consumption, meaning it is available to all members of society without depletion.

Nonrival

Refers to a good where one person's use does not reduce the amount available for others.

Nonexcludable

A characteristic of goods where it is difficult or impossible to prevent people from using the good once it has been provided.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to every individual without diminishing availability to others, such as national defense, public parks, and clean air.