Hickory Divine Is One of the Leading Manufacturers in the Hardwood

question 57

Multiple Choice

Hickory Divine is one of the leading manufacturers in the hardwood furniture industry. Hickory Divine has many small competitors, none of which controls a significant portion of the industry. Hickory, like most of the furniture manufacturers, sells its products to a broad variety of small furniture stores throughout the country, none of which represents a large percentage of Hickory's sales. When purchasing the products it uses for manufacturing its furniture, Hickory is able to choose from many suppliers since the wood it uses is an undifferentiated commodity, and Hickory is able to easily switch to any supplier that has the best price and delivery times. While growth in the hardwood furniture industry has historically been in the double digits, the industry growth rate has slowed considerably into the single digits, to approximately 5% in recent years; consumers have been purchasing less expensive furniture made of composite wood that is considerably less expensive than hardwood furniture but that looks and functions very similarly once it is painted.
-The level of direct competition in the hardwood furniture industry can best be described as

• A) low because of the numerous firms in the industry and the slowing growth rate.
• B) low because of the slowing growth rate and the competition from composite wood furniture.
• C) high because of the numerous firms in the industry and the slowing growth rate.
• D) moderate because the slowing growth rate offsets the numerous firms in the industry.

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Definitions:

Susceptible

Being likely to be influenced or harmed by a particular thing or condition.

Collective bargaining

The process where representatives of workers and employers negotiate over wages, working conditions, and other employment terms.

Government economic policy

Refers to the actions taken by a government to influence its economy, including tax policies, spending programs, interest rate management, and labor regulation.

Independent union

A labor union that represents workers but is not affiliated with any larger union organization, often focusing on specific workplace issues.