Innovations That Lower Production Costs or Create New Products

question 77

Multiple Choice

Innovations that lower production costs or create new products

• A)are rare in competitive industries.
• B)discourage new firms from entering the industry.
• C)often generate short-run economic profits that do not last into the long run.
• D)usually generate long-run economic profits for the innovator.

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Definitions:

Average Payment Period

The average time it takes a company to pay off its accounts payable.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Average Sales Period

The average amount of time it takes for a company to sell its inventory, which can reflect its inventory management efficiency.

Liquidity

The ability of an entity to quickly convert its assets into cash or to pay off its current liabilities.