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1.
What is an economic moat?
A long-term competitive advantage that allows a company to earn oversized profits over time. A moat protects the business and does not let other businesses in.
2.
High switching costs help companies _______.
Raise prices without the risk of losing customers.
3.
Which of the following questions will not likely help you analyze a business?
None of the above. All of the above are good questions to ask in business analysis. There are hundreds more, of course. But these are a good start.
4.
Which of these companies best exemplifies the use of the network effect?
EBay. eBay is the quintessential example of a company with a strong network effect.
5.
Of the following four questions about business analysis, which one would you most likely need outside help answering?
How well is the business positioned relative to its competitors? For this one, you would need to get information about several other businesses to help you answer it.
