The Most Useful Approach to Forecasting Industry Profitability in the Future

question 1

Multiple Choice

The most useful approach to forecasting industry profitability in the future is:

• A)To estimate the industry's revenues and costs in future years
• B)To use an industry's probability at similar stages of the business cycle in the past as an indicator of future profitability
• C)To extrapolate the trend of industry profitability into the future
• D)To understand how the industry's structure has determined competitive intensity and profitability in the past,then to use information on an industry's changing structure to predict how profitability is likely to change in the future

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Definitions:

Norm

A standard or guideline that is accepted and expected within a group, culture, or society, dictating behavior that is considered normal or appropriate.

Reciprocity

A social exchange principle where the actions of one party lead to a response by another party, typically in a manner that mirrors the original action.

Norm Of Reciprocity

A social expectation that dictates individuals should return favors and kindnesses that others have provided to them, creating a basis for cooperative behavior.

Social Exchange

A concept proposing that the formation of human connections is guided by an individual assessment of potential gains and losses, alongside an evaluation of other options.