What can be inferred about Sarah's new company compared to well-established companies?

Boost your skills for the ATI Critical Thinking Test. Study with targeted questions and detailed explanations. Prepare effectively for your exam!

Inferences made about new companies compared to well-established ones often highlight the inherent risks associated with starting a new venture. New companies typically face a range of challenges, including lack of brand recognition, untested business models, and limited resources, which contribute to a higher likelihood of failure. Statistical evidence suggests that many new startups do not survive past their initial years due to these factors, making it reasonable to conclude that new companies are generally more prone to failure.

Conversely, well-established companies have historically proven their ability to navigate market challenges successfully over time, which can lead to assumptions about their stability and success. It is important to recognize that while some established companies do fail, they typically have a track record of experience, resources, and brand loyalty that new companies have yet to develop. Therefore, the inference drawn aligns with widely accepted business principles regarding the challenges faced by new ventures.

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