When Considering the Impact of Product Differentiation on the Threat

question 48

Multiple Choice

When considering the impact of product differentiation on the threat of rivalry, product differentiation

• A) reduces the threat of rivalry to zero.
• B) increases the threat of rivalry by forcing each firm in an industry to compete directly with one another instead of allowing them to carve out their own unique product niche.
• C) has no impact on the threat of rivalry.
• D) reduces the threat of rivalry because each firm in an industry attempts to carve out its own unique product niche.

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Definitions:

Normal Debit

An account entry that increases asset or expense accounts, or decreases liability, equity, or revenue accounts, reflecting in the left column of a double-entry accounting system.

Normal Credit

In accounting, it refers to the balance side (either credit or debit) that is expected for a particular type of account; for liability accounts, equity accounts, and revenue accounts, it is typically a credit balance.

Asset

Resources owned or controlled by a company expected to provide future economic benefits.

Liability

A financial obligation or debt that a company is required to repay to another entity in the future.