Firms Use the Five Forces Model to Identify the of the Industry

question 50

Multiple Choice

Firms use the five forces model to identify the of the industry as measured by its

• A)size; number of competitors.
• B)globalization; exports.
• C)hypercompetition; technology diffusion.
• D)attractiveness; profitability.

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are expensed in the period in which they are incurred, such as selling, general, and administrative expenses.

Opportunity Cost

The cost of forgone alternatives when one option is chosen over another.

Administrative Expense

Costs related to the general operation and administration of a business, including salaries of executive personnel, office supplies, and utilities.

Direct Labor Cost

The total cost of wages paid to labor directly involved in the production of goods or services.