Entrepreneurship Summative 3

What is the key function of market research in entrepreneurship?

• To minimize production costs

• To understand and meet the needs of potential consumers

• To eliminate competitors

• To design a financial plan

When identifying a potential market, which action should an entrepreneur take first?

• Analyze competitors' pricing strategies

• Perform a comprehensive market research study

• Focus on advertising the product

• Launch the product immediately

How is a potential market best defined?

• A group of individuals who might consider purchasing the product in the future

• A market dominated by one company

• A fully established customer base

• A market with decreasing demand

Why is it important for businesses to assess customer needs before product development?

• To ensure customer satisfaction and product-market fit

• To reduce the cost of marketing

• To limit the number of competitors

• To avoid hiring too many employees

What factor is least likely to affect the size of a potential market?

• Customer preferences

• Product packaging design

• The proximity of suppliers

• Economic conditions

How does competition in a market affect business innovation?

• It discourages new businesses from entering the market

• It encourages businesses to continually improve their products and services

• It leads to an increase in product prices

• It decreases product quality

What makes a market opportunity unattractive to entrepreneurs?

• High levels of demand

• Low production costs

• High production costs

• Low competition

A market where a single company dominates without any competitors is known as:

• An oligopoly

• A monopoly

• A niche market

• A saturated market

Why do entrepreneurs create business plans when identifying potential markets?

• To increase production efficiency

• To communicate market opportunities to investors

• To avoid hiring employees

• To decrease customer demand

Market segmentation refers to:

• Dividing potential customers into groups based on shared characteristics

• Reducing production costs

• Increasing product prices

• Enhancing brand loyalty