Software Companies Have High Fixed Costs and Low Marginal Costs

question 55

Multiple Choice

Software companies have high fixed costs and low marginal costs.This means that if a software company sells its product in the global market,

• A) it will gain a large benefit from its fixed investment and generate higher profits.
• B) it will lose money because the additional expense of selling in the global market will add a large amount to fixed costs and add very little to revenues.
• C) the company will earn more money in the short run, but lose money in the long run as entry into other markets encourages more competition.
• D) the country in which the software company is located will suffer losses because the price of the software will rise with the additional worldwide demand.

Develop the ability to logically deduce probabilities using complementary events.

Understand probability distributions and their applications.

Understand the distinction between active and passive listening.

Identify and explain the components of effective communication channels.

---

Definitions:

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, which can impact cash flow and sales.

Monthly Interest Rate

The interest rate charged or paid on a loan or savings account calculated on a monthly basis.

Default Rate

The percentage of borrowers who fail to repay their loans or meet contractual obligations.

Monthly Interest Rate

The percentage of an amount of money which is charged or paid as interest for one month.