(2) An economics illiterate friend of yours with great technicalknowledge in space exploration wishes to start a...
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(2) An economics illiterate friend of yours with great technicalknowledge in space exploration wishes to start a new company in herarea of expertise. After reading a do-it-yourself entrepreneurmanual she finds out that the basic blueprint for a company’sprofitability and survival involves three elements.
(A) Find a starting niche from which the firm canexpand.
(B) Produce the product at scale
(C) Create a sales-and-distribution network (3%)
Which of the following statements provides the economicrationale for which stage in the above sequence?
- Minimisation of fixed costs of production
- Gaining access to stock exchange finance
- Exploitation of monopoly power to earn economic profits
- Reduction of average cost of production
- Securing long-run lease for the premises of the company
- Obtaining government subsidies
- Reduction of transaction costs
- Minimisation of profit tax
Related Book For
Entrepreneurship Successfully Launching New Ventures
ISBN: 978-0133797190
5th edition
Authors: Bruce R. Barringer, R. Duane Ireland
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