Multiple Choice
Which of the following external forces is considered part of a firm's task environment in a competitive market?
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3. The Market Forces of Supply and Demand
Competitive Markets
Multiple Choice
In a competitive market, the competitive power of a company's resource depends on:
A
the total number of employees in the company
B
the company's advertising budget
C
how rare and difficult it is for competitors to imitate or substitute the resource
D
the age of the company
Verified step by step guidance1
Understand the concept of competitive power of a company's resource: It refers to how much advantage a company gains from a particular resource compared to its competitors.
Recognize that in microeconomics, a resource's competitive power is often linked to its uniqueness and the difficulty competitors face in replicating or substituting it.
Evaluate the options given: total number of employees, advertising budget, rarity and difficulty of imitation, and age of the company.
Recall the principle that resources which are rare and hard to imitate or substitute provide sustainable competitive advantage, as competitors cannot easily replicate them.
Conclude that the competitive power depends primarily on how rare and difficult it is for competitors to imitate or substitute the resource, rather than on size, budget, or age alone.
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