Question 21

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In the start up phase of the product life-cycle:

		profits are negative
		owners usually have pre-production contracts with potential buyers
		risk is lowest
		sales grow explosively

Question 22

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Which of the following legal business forms is easiest to establish?

		Sole proprietorship
		General partnership
		Limited liability company
		Corporation

Question 23

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According to Richard Foster, market leaders often become losers and are supplanted by a new generation of companies because:

		they do not invest enough money in R&D
		their marketing strategies become old hat and lose their impact
		new companies are willing to invest more in R&D than well-established companies
		they invest primarily in existing successful technologies that are near the end of their technology life-cycle

Question 24

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Innovation________.

		is another word for invention
		applies solely to engineering advances
		requires patenting of products that are produced
		requires inventions to be employed practically

Question 25

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You can publish a book titled The Godfather without violating copyright law.

	True
	False

Question 26

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Creative destruction where major companies are overwhelmed by innovation is a natural consequence of capitalism.

	True
	False

Question 27

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The primary goal of quality control charts is:

		to show graphically the rate at which production quality improves
		to anticipate changes in the cost of production
		to determine whether goods produced lie within the range of tolerable variation
		to document the number of products produced that conform to specifications

Question 28

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Later stage financing of a burgeoning venture is often used for:

		designing new products
		establishing production capabilities
		developing a detailed business plan
		acquiring other companies in order to accelerate growth

Question 29

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Piracy is concerned with:

		unauthorized use of copyrighted material
		unauthorized use of patented technology
		unauthorized use of trade marks
		unauthorized use of trade secrets

Question 30

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Richard Fosters concept of the defenders paradox holds that:

		by defending their existing successful innovations, companies are actually developing a good offensive strategy
		companies that continue to invest heavily in their successful innovations find that at a certain point, the returns on their additional investment drop dramatically
		when companies find their products being challenged by new market entrants, their best strategy is to strengthen their weakest products in order to throw the attackers off guard
		when cornered, defenders can be stronger than their attackers