Higher costs that result from increased competition in an industry will:YOUR ANSWERYour Answerimprove a business’s financial liability.increase, decrease or have no impact on a business’s financial liability.have no change on a business’s financial liability.decrease a business’s financial liability.
Question
Higher costs that result from increased competition in an industry will:YOUR ANSWERYour Answerimprove a business’s financial liability.increase, decrease or have no impact on a business’s financial liability.have no change on a business’s financial liability.decrease a business’s financial liability.
Solution
Higher costs that result from increased competition in an industry will increase a business’s financial liability.
Here's why:
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Increased competition in an industry often leads to higher costs for businesses. This is because businesses may need to invest more in areas like marketing, research and development, and customer service to differentiate themselves from competitors and attract customers.
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These higher costs can increase a business’s financial liability. Financial liability refers to the obligations or debts that a business owes and must pay. If a business has higher costs, it may need to borrow more money or use more of its profits to cover these costs, which can increase its financial liabilities.
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Therefore, increased competition can indirectly lead to an increase in a business’s financial liability by increasing its costs.
Similar Questions
Which of the following is not a positive outcome of increased competition for a business?YOUR ANSWERYour AnswerAn increase in revenue and a decrease in costs.Decreased cash flow and difficulties repaying loans.Decreased revenue due to lower prices and quantity sold.Falling profit and reduced profit margins.
A new business entering an industry might improve the financially viability of all businesses in that industry by:YOUR ANSWERYour Answerincreasing their revenue streams due to increased customer demand.increasing the costs for scarce resources.decreasing demand as marketing by all businesses increases.increasing skills shortages.
Which of the following can we be sure will explain an improvement in the financial viability of a business?YOUR ANSWERYour AnswerAn increase in revenue.A decrease in costs and an increase in revenue.A decrease in costs.An increase in revenue and an increase in costs.
A danger associated with engaging in price competition is that competitors can also change prices quickly and aggressively, which can result in a(n) __________ that will be harmful to both companies.Select one:a.reduction in costsb.industry collapsec.competitive drawd.price war
igher costs that result from increased competition in an industry will:
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