When looking at entering the marketplace, a prospective entrant should not consider fixed costs, as these will become sunk.

Question

Quizplus · Accepted Answer

Fixed costs are important for a prospective entrant to consider because they represent initial and ongoing expenses that the business must cover to operate, regardless of its production level or sales volume. Understanding these costs helps in planning and decision-making.

When Looking at Entering the Marketplace, a Prospective Entrant Should