One of the Important Conditions That a Firm Must Meet

question 67

Multiple Choice

One of the important conditions that a firm must meet in order to gain a sustainable competitive advantage with its capital is:

• A)the firm's overhead costs must be high.
• B)the firm's resources must be imperfectly imitable.
• C)the firm's production technology should be obsolete.
• D)the firm's product prices must be high.
• E)the firm's organization must be highly centralized.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that consumers are willing to purchase at various prices.

Elastic

Describes a situation in which the quantity demanded or supplied of a good or service is significantly affected by changes in its price.

Pure Monopolist's Demand Curve

A graphical representation showing how a monopolist's quantity sold varies with price, typically downward sloping, reflecting that the monopolist can set prices above marginal costs.

Elastic

A characteristic of a good or service indicating that its demand or supply is sensitive to changes in price.