All of the Following Are Ways by Which Existing Firms

question 243

Multiple Choice

All of the following are ways by which existing firms can deter the entry of new firms into an industry except

• A)continuously producing new and improved products.
• B)earning less than maximum profit.
• C)advertising products aggressively.
• D)threatening to raise prices.

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Definitions:

Time Value

The principle stating that having money now is preferable to the same sum later, owing to the earnings it could potentially accrue.

Disadvantage

refers to a unfavorable condition or position that reduces the chances of success or effectiveness.

Average Accounting Return

A financial ratio that compares the average annual net income of an investment to its initial cost to assess its profitability.

Accounting Basis

The method in which income and expenses are recognized in the accounts; common methods include cash basis and accrual basis accounting.