In Analyzing the Strength of Competition Among Rival Firms, an Important

question 51

Multiple Choice

In analyzing the strength of competition among rival firms, an important consideration is

• A)the potential for buyers to exercise strong bargaining power.
• B)the diversity of competitors in terms of long-term direction, objectives, strategies, and countries of origin.
• C)the number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership strategies and focus strategies.
• D)the extent to which some rivals have more than two competitively valuable competencies or capabilities.
• E)whether the industry is characterized by a strong learning/experience curve and whether the industry is composed of many or few strategic groups.

Relate the concepts of investment, savings, and economic growth to shifts in the PPF.

Explain how the PPF illustrates the trade-offs between producing different combinations of goods.

Understand how efficiency and inefficiency are depicted by the PPF.

Associate the production of specific goods with points on the PPF, understanding opportunity costs related to varying production levels.

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Definitions:

Sales Orders

Formal documents issued by a buyer to a seller authorizing the sale of a specific quantity of goods at a specified price, which upon acceptance, becomes a contract.

Machine Breakdowns

Situations when industrial or office machinery stops functioning due to mechanical failure, necessitating repair or replacement.

Utility Costs

Expenses incurred for essential services such as electricity, gas, water, and sewer, which are necessary for operating a business or maintaining a home.

Variable Factory Overhead Controllable Variance

The difference between actual variable overhead incurred and the expected (or budgeted) variable overhead based on standards set by management.