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1.
Having an efficient scale also means having a wide moat.
False. Although there are some efficient-scales with wide moats, the majority of them have narrow moats.
2.
A company can achieve the 'network effect' simply by more people using its product or service.
True. As more people use it, its value to the marketplace grows.
3.
There are many ways a company can build a sustainable competitive advantage in its industry. Which of the following is not one of them?
None of the above. All of these approaches can build a sustainable competitive advantage.
4.
In the language of companies, what are switching costs?
Expenses incurred to switch over from one product to another. From the company's point of view, these can be a very positive thing.
5.
How can a low-cost producer achieve a barrier to entry?
All of the above. These are all ways that a low-cost producer can achieve barriers to entry.
6.
When a company tries to differentiate its product from those of its competition by spending money on marketing, it is attempting to create what type of moat?
Intangible assets. Marketing is generally done to build brands, and brands are intangible assets.
