Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
A company that was once a major player in its market but is now suffering the effects of increased buyer power and a flight to other, related products would have a _______.
Narrow moat. It would have a narrow moat of the eroding variety.
2.
If a company is involved in doing a lot of different things very well, that is a sign that it has a deep economic moat.
True. In this case, they are really good at more than one competitive advantage.
3.
An example of easy entry into a market would be _______.
A company signing up to become a seller on eBay. Signing up for eBay would be a good example of a new company easily entering the marketplace.
4.
Why is it a good idea to avoid investing in companies that lack economic moats?
They have few competitive advantages to keep rivals away. The definition of a moat is that of a competitive advantage over other companies.
5.
Private-label products are an example of _______.
Threat of substitutes. Private-label products are an example of the threat of substitutes. These products threaten the sales and margins of branded products, which are typically more expensive to produce.
