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An entrepreneur creates a product after observing a popular trend but does not examine whether the trend may end. Which risk has been ignored?

Answer and explanation

Correct answer: Long-term market risk

A popular trend may be temporary. If the trend ends and demand for the product falls, the business may face lower sales and profits; this is a long-term market risk. Employee training, transport, and record-keeping are important business concerns, but they do not address uncertainty about demand after a trend fades. Exam tip: For a trend-based product, check future demand and market stability.

Related tags

EntrepreneurshipMarket RiskTrend AnalysisDemand ForecastingBusiness PlanningIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial Intelligence

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