Which statement below can we be sure is true?YOUR ANSWERYour AnswerWhen a new firm enters a market the market share of all other businesses will decrease.As price goes up customers will always buy less.Market share is the proportion of the total market held by a company or product.Market size is the most important determinate for the success or failure of a business.
Question
Which statement below can we be sure is true?YOUR ANSWERYour AnswerWhen a new firm enters a market the market share of all other businesses will decrease.As price goes up customers will always buy less.Market share is the proportion of the total market held by a company or product.Market size is the most important determinate for the success or failure of a business.
Solution
The statement that we can be sure is true is: "Market share is the proportion of the total market held by a company or product." This is a standard definition in business and economics. The other statements are not always true as they depend on various factors. For example, when a new firm enters a market, it may not necessarily decrease the market share of all other businesses, especially if the market is growing. Similarly, customers may not always buy less as price goes up, especially for goods that are inelastic in demand. Lastly, market size is not the most important determinant for the success or failure of a business. Other factors such as the business model, management, competitive advantage, etc., also play crucial roles.
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