The Characteristics of a World Market Where Global Competition Prevails

question 126

Multiple Choice

The characteristics of a world market where global competition prevails include:

• A) a market situation where competitive conditions across national markets are linked strongly enough to form a true world market and where leading competitors typically compete head to head in many different countries.
• B) minor cost variations from country to country (as concerns production,distribution,sales and marketing,and other primary components of the industry value chain)and minimal cross-country trade restrictions.
• C) a competitive environment comprised of so many competitors that no company has a sizable worldwide market share.
• D) many companies racing for global market leadership,with most contenders using the same basic type of competitive strategy and positioned in the same strategic group.
• E) low barriers to entry,such a large number of rivals that the actions of any one rival have little impact on the sales and market shares of other rivals,and key success factors that vary from country to country.

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Definitions:

Average Total Cost

Calculated as the sum of all production costs divided by the number of units produced, representing the per unit cost of production.

Average Variable Cost

The sum of all costs that vary with output levels, divided by the total output generated.

Economies of Scale

The cost advantage that arises with increased output of a product, as the fixed costs are spread over more units of production.

Adam Smith

An 18th-century Scottish economist and philosopher, best known for his theories of the free market and the "invisible hand" guiding economies.