Cost disadvantages for new entrants can arise from
A) technology, location, and raw materials
B) learning, government subsidies, and socio-cultural factors
C) location, raw materials, and demographic factors
D) technology, government subsidies, and competitive rivalry

Question

Quizplus · Accepted Answer

Cost disadvantages for new entrants can come from a variety of sources, but the options provided focus on three possible factors. Of the three options, only (A) includes all three factors that can impact costs for new entrants, including technology (the cost of acquiring and implementing new technology), location (including rent and transportation costs), and raw materials (the cost of supplies necessary to produce goods). While (B) and (C) include some factors that can contribute to cost disadvantages, they don't capture all three. (D) includes only two factors, missing raw materials as a potential source of cost disadvantage.

Cost Disadvantages for New Entrants Can Arise from