Business Establishment Options and Pricing Methods Quiz

What are the three establishment options mentioned for starting a business?

• Setting up a business from scratch, Purchasing an existing business, Purchasing a franchise

• Setting up a business from scratch, Buying stocks, Investing in real estate

• Purchasing a franchise, Buying stocks, Investing in real estate

• Purchasing an existing business, Buying stocks, Setting up a business from scratch

Under what condition is starting a new business more favorable than buying an existing one?

• When the market is saturated

• When a person has created something unique

• When there is no competition

• When the economy is declining

What is a potential disadvantage of starting a business from scratch?

• Lack of innovation

• Considerable competition from existing SMEs

• High employee turnover

• Limited market access

What is one advantage of starting a business from scratch?

• High risk and uncertainty

• Freedom to set up the business as desired

• Difficulty in securing finance

• No existing customer base

What is a disadvantage of starting a business from scratch?

• Existing customer base

• Established reputation

• High risk and uncertainty

• Immediate income generation

What is a franchisor?

• A person who buys the rights to use a business name

• A business that grants the rights to use its name and products

• A person who sells products under a brand name

• A company that manufactures goods

What is a common feature of franchising?

• Lack of brand recognition

• Established business name and trademarks

• No support from the franchisor

• No advertising is provided

What is a potential disadvantage for a franchisee regarding supplies?

• The franchisee can choose any supplier

• The franchisee must purchase from the franchisor

• The franchisee has no restrictions on suppliers

• The franchisee can negotiate prices freely

Which pricing method involves setting prices according to supply and demand?

• Cost-based

• Market-based

• Competition-based

• Value-based

In the cost-based pricing method, what do businesses 'add' to the total cost of producing a product to get the final price?

• A mark-up

• Expenses

• Salaries

• Profit