Final answer:
New companies are more likely to fail, but there are factors that can contribute to the success of a company.
Step-by-step explanation:
In the model of perfectly competitive firms, many businesses fail. The U.S. Small Business Administration indicates that in 2011, 534,907 new firms entered, and 575,691 firms failed. Sometimes businesses fail due to poor management, unproductive workers, tough competition, or shifts in market conditions.
However, the fact that new companies are more likely to fail than well-established companies does not necessarily mean that Sarah's company will fail. While it is true that the failure rate for new businesses is higher, there are several factors that can contribute to the success or failure of a company.
Factors such as strong leadership, solid business plans, innovative products or services, market demand, and effective marketing strategies can help new companies succeed despite the challenges they may face.