The Resource-Based View of the Firm

question 43

Multiple Choice

The resource-based view of the firm

• A)emphasizes that it is difficult to develop and sustain a competitive advantage based on resources alone.
• B)argues that the industry environment has a stronger influence on firms' ability to implement strategies successfully than does the competitor environment.
• C)calls for firms to focus on their homogeneous capabilities to compete against their rivals.
• D)suggests that vision and mission are closely linked to sustainable competitive advantage.

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Definitions:

Output

refers to the total amount of goods or services produced by a firm, industry, or economy within a certain period.

Profit-Maximizing Rule

A principle stating that profit maximization occurs when a firm expands output until marginal cost is equal to marginal revenue.

MR = MC

The condition for profit maximization in economic theory, where marginal revenue (MR) equals marginal cost (MC).

Economic Profit

The discrepancy across total turnover and total spendings, including expenses both explicit and implicit.