New-economy companies generally have higher __________ than old-economy companies.

• A. inventory levels
• B. fixed costs
• C. growth potential
• D. regulatory barriers

Answer: (C)

Verified step by step guidance

1. Understand the context: 'New-economy' companies typically refer to firms in technology, internet, or innovative sectors, while 'old-economy' companies are in traditional industries like manufacturing or utilities.
2. Identify the characteristics of new-economy companies, such as rapid innovation, scalability, and market expansion opportunities.
3. Compare these characteristics with those of old-economy companies, which often have more physical assets and established markets but slower growth.
4. Recognize that 'growth potential' refers to the expected rate at which a company can increase its revenues or market share over time.
5. Conclude that new-economy companies generally have higher growth potential than old-economy companies due to their innovative nature and scalability.