Which of the Following Statements Is True of Direct Competition

question 103

Multiple Choice

Which of the following statements is true of direct competition?

• A) It is determined by market commonality and resource similarity.
• B) It encourages the production of perfectly imitable resources.
• C) It uses cost leadership to produce a specialized product for limited customers.
• D) It minimizes the effects of industry competition.

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Definitions:

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.

Study Time

The amount of time allocated towards learning or acquiring knowledge on a particular subject or group of subjects.

Learning Process

The ongoing process of acquiring new understanding, knowledge, behaviors, skills, values, or preferences, often facilitated through various methods of education or experience.

Minimum Efficient Scale

The smallest level of production at which long-term average costs are minimized, enabling businesses to achieve the best possible economies of scale.