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An entrepreneur's business is profitable but depends on only one product. Which weakness may appear if market preferences change?

Answer and explanation

Correct answer: Product concentration risk

When most revenue comes from one product, a change in customer tastes, technology, regulation, or competition can sharply reduce sales. This is product concentration risk. Carefully developing related products or serving suitable segments can spread exposure, although diversification must be managed sensibly. Profitability today does not remove vulnerability tomorrow. Therefore A is correct.

Related tags

Product-DependenceMarket-RiskIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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