Question

As a barrier to new entry, absolute cost advantages can be based on:

A. continuous advertising of brand and company names, and product innovation achieved through research and development.
B. high product quality, service-oriented innovations, and good after-sales service.
C. the unique ability of established companies to spread fixed costs over a large volume.
D. cost reductions that arise from the mass production of standardized output.
E. superior production operations and processes due to accumulated experience, patents, or trade secrets.

Answer 1

E. superior production operations and processes due to accumulated experience, patents, or trade secrets.

Step-by-step explanation:

The absolute cost advantages Is an economic principle which states: than a firm has absolute cost advantages when using the same amount of resourses than a competitor is able to produce or sell more of a good or service.

From the given options:

E is the correct as: It represent the better use of the same raw material, machinery and labor hours to generate a better output than competitors.