Which of the Following Statements Is True of Direct Competition

question 18

Multiple Choice

Which of the following statements is true of direct competition? 

• A) ​It is determined by two factors: market commonality and resource. 
• B) ​It does not follow a consistent strategy. 
• 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:

Merchandise Inventory

Goods or stock held by a business for the purpose of resale to customers.

Purchase Discounts

Reductions in price given by suppliers for early payment or bulk purchasing.

Controlling Account

A general ledger account that summarizes the total balances of several subsidiary accounts.

Accounts Payable

Liabilities to suppliers or creditors for items or services purchased on credit.