Scenario B

question 75

Multiple Choice

Scenario B. Use the information in the following paragraph to answer the questions that follow. You and a fellow investor are investigating the possibility of starting a new casino in Black Hawk, Colorado, a small town in the Rocky Mountains. It has been your lifelong dream. You have won the lottery and are trying to decide if this is what you want to do with your prize money. You decide to do an analysis of the competitive environment. After your analysis, you discover several important issues. First, it will cost most of your lottery winnings to finance a casino in Black Hawk! Second, it will be difficult to attract new customers because they have so many choices available to them in Black Hawk and the surrounding small towns. Finally, the competition in the casino industry is considered "fierce" by industry analysts and this is frightening to someone who has never even worked in the casino industry.
-The fact that it will require such a large capital investment to start a new casino is an example of which of the following factors?

• A) high bargaining power of customers
• B) low threat of new entrants
• C) high threat of new entrants
• D) many substitute products
• E) low bargaining power of customers

---

Definitions:

Limitations

Restrictions or constraints that define the boundaries or extent to which something can be applied or achieved.

Compensation Survey

A tool used to gather and analyze compensation data within an industry or region to benchmark salaries and benefits.

Conducting

The act of leading, directing, or managing an activity or group of people, often in the context of music or research.

Steps

Sequential actions or procedures designed to accomplish a specific task or to reach a particular goal.