The Resource-Based View of Firm Implies That

question 16

Multiple Choice

The resource-based view of firm implies that:

• A)The boundaries of the firm are determined by the firm's resources rather than by transaction costs
• B)The resources of the firm are the foundation for its capabilities
• C)Resources and capabilities are the principal basis for firm strategy and the primary source of profitability
• D)Ricardian rents are a more important source of firm profitability than monopoly rents Schumpeter

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Definitions:

Labor

The exertion of mental or physical strength by humans to create goods and services.

Fixed Cost

Fixed cost refers to a cost that does not change with the level of goods or services produced by a business over a certain period.

Production

The creation or manufacture of goods and services with the combination of labor, equipment, technologies, and raw materials.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the output per unit of the variable factor will eventually decrease.