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A business gains more customers, but the cost of serving each customer also rises greatly. What should the entrepreneur examine?

Answer and explanation

Correct answer: Whether customer growth is profitable

The entrepreneur should compare the revenue or contribution earned from an additional customer with the full cost of serving that customer. Growth is beneficial only when the amount earned is greater than the relevant service cost and supports overall profit. Looking only at customer numbers can hide losses, while decoration and a competitor’s logo do not answer the profitability question.

Related tags

Customer-CostProfitabilityBusiness-GrowthIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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