Which of the Following Theories for Explaining a Firm's Competitiveness

question 38

Multiple Choice

Which of the following theories for explaining a firm's competitiveness centers on just one element of business activity: whether it is cheaper for a firm to make or to buy the products that it needs?

• A) Resource-based theory
• B) Enactment
• C) Transaction cost economics
• D) Environmental determinism
• E) Institutional theory

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Definitions:

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects receivables or the speed of their customer payments.

Average Receivables

A measure that summarises the average amount of accounts receivable over a specific period, often used to assess the effectiveness of a company's credit and collection policies.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, often including balance sheet, income statement, and cash flow statement.