When Competitive Forces in an Industry Are Weak

question 161

Multiple Choice

When competitive forces in an industry are weak,

• A) the absence of competition generally leads to overproduction.
• B) prices may exceed the amount consumers are willing to pay.
• C) the operational efficiency of private firms will be enhanced.
• D) higher prices and less than optimal production may result.

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Definitions:

Correlate

To possess a reciprocal relationship or link, where one element influences or relies upon another.

Measures

Tools or instruments used to quantify or categorize variables, typically for the purpose of research or assessment.

Test Validity

The degree to which a test accurately measures what it intends to measure.

Hypothetical Constructs

Theoretical entities or concepts that are not directly observable but are used to explain or predict behavior or phenomena.