Compared to New Entrants, Existing Firms That Have Made Substantial

question 55

Multiple Choice

Compared to new entrants, existing firms that have made substantial investments in their operations have a

• A) timing advantage
• B) technological disadvantage
• C) cost advantage
• D) competitive disadvantage

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Definitions:

Contribution Margin

The gap between sales income and variable expenses, demonstrating the extent to which income aids in covering constant costs and producing earnings.

Average Costs

The cost per unit of output on average, calculated by dividing total costs by the total quantity of output.

Selling Price

Selling price is the amount of money a buyer pays to purchase a product or service from a seller.

Incremental Cost

An increase in cost between two alternatives.