The Five-Forces Model Suggests That with Intense Competition an Overall

question 9

True/False

The five-forces model suggests that with intense competition an overall low-cost position will not enable a firm to achieve above-average returns.

---

Definitions:

Social Regulation

Rules designed to protect the health, safety, and welfare of the public, often including environmental and worker safety regulations.

Allocative Efficiency

The apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its marginal cost and price or marginal benefit are equal, and at which the sum of consumer surplus and producer surplus is maximized.

Small Firms

Businesses with a limited number of employees and revenue, often characterized by more personalized customer service and less market control compared to larger companies.

Ergonomics Regulations

Rules and guidelines designed to create safe and comfortable working environments by studying human interaction with elements in the system.