Using Porter's Analysis, Firms Are Likely to Generate Higher Profits

question 70

Multiple Choice

Using Porter's analysis, firms are likely to generate higher profits if the industry includes which of the following?

• A) Difficult to enter
• B) Unlimited rivalry
• C) Buyers are strong
• D) There are many substitutes

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Definitions:

Public Good

Services or commodities provided to all societal members without a fee, by the government or a private organization, not for profit.

Tiebout Hypothesis

An efficient mix of public goods is produced when local land/housing prices and taxes come to reflect consumer preferences just as they do in the market for private goods.

Public Goods

Goods that are neither excludable nor rival in consumption, meaning anyone can use them, and one person's use does not diminish the ability of another to use it also.

Optimal Level

The most efficient, effective, or desirable point or state for a specific circumstance or variable.