On average each year, about 7 percent of all firms in the United States are new and 1 percent go out of business. According to the text, luck may play a role. Which of the following reasons for failure might be attributable to luck?
A) An individual undertakes a very risky venture so that his product is first to market.
B) An executive fails to undertake an investment that would have yielded great success.
C) An executive focuses on the incorrect objective.
D) An executive undertakes an investment just prior to a major natural catastrophe that destroys the firm's assets.
E) An executive fails to perceive what customers really want.
D
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The aggregate production function is bowed or concave because
A) of the diminishing marginal returns of labor. B) restriction in capital mobility. C) of the speed of payment systems. D) the learning curve for labor.
Advertising is used by firms in a monopolistic competitive industry to
A) differentiate their product from those of competitors. B) increase brand loyalty. C) increase demands for their individual products. D) all of the above.