CharmingBells Inc. has been running into a loss gradually, but the board of dire
ID: 369552 • Letter: C
Question
CharmingBells Inc. has been running into a loss gradually, but the board of directors are reluctant to shut the company down because it has invested millions of dollars’ worth of equipment which can only be used in that industry. Moreover, the people in CharmingBells Inc. have become emotionally attached to the company and do not want the company completely shut down. This scenario best illustrates _____.
A. high fixed cosst
b. high exit barriers
c. used production capacity
d.unused production capacity
Explanation / Answer
Answer is B, which is High exit barriers, Its mean any things which is blocks the ability of a company to leave an industry.