Which of the Following Statements Concerning the Competitive Environment Is

question 66

Multiple Choice

Which of the following statements concerning the competitive environment is true?

• A) High fixed costs encourage firms to produce at a low level of capacity, in order to minimize fixed cost per unit produced.
• B) Low current prices relative to costs in an industry indicate low barriers to entry.
• C) Substantial economies of scale do not give a current industry member an advantage over a new firm.
• D) The ability to substitute another product limits the industry's profit potential.
• E) Buyers and suppliers do not influence the profitability of an industry.

---

Definitions:

Decentralization

Refers to distributing the decision-making powers and leadership roles away from a central authority to more local or individual levels within an organization.

Authority

A capability to prescribe actions, make choices, and insist on obedience.

Organizational Design Decisions

Pertain to the process of shaping an organization's structure and roles to align with business goals, strategies, and processes.

Functional Design

The process of creating products, systems, or structures with a focus on optimal functionality.