Multiple Choice
In a competitive market, just how strong the competitive pressures are from other firms is primarily determined by:
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
A competitive advantage becomes a sustainable competitive advantage when:
A
It leads to a temporary increase in market share.
B
It cannot be easily duplicated or surpassed by competitors over time.
C
It is based solely on lowering prices below competitors.
D
It results from government intervention in the market.
Verified step by step guidance1
Understand the concept of competitive advantage: it refers to a firm's ability to perform in one or more ways that competitors cannot easily replicate, giving the firm an edge in the market.
Recognize that a competitive advantage is considered sustainable when it persists over time, meaning competitors cannot easily copy or overcome it.
Analyze why a temporary increase in market share does not imply sustainability, as competitors may quickly imitate or counteract the advantage.
Consider that simply lowering prices is often not sustainable because competitors can match or undercut prices, eroding the advantage.
Note that government intervention might create a temporary advantage but does not guarantee sustainability unless it prevents competitors from entering or replicating the advantage.
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