In a Competitive Market,a Firm Has a Difficult Time Capturing

question 10

Multiple Choice

In a competitive market,a firm has a difficult time capturing value due to the large number of rivals.However,it can be successful in capturing value if the

• A)firm's cost curves are higher than those of rivals.
• B)firm's superior productivity is based on value of the whole organization.
• C)firm's superior productivity is based on selected components of superiority within the firm.
• D)demand for the firm's product is inelastic.

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Definitions:

Spin-off

A type of corporate restructuring where a company creates a new independent company from its existing operations, assets, or divisions.

Divestiture

The opposite of an acquisition. That is, a company sells a portion of its assets, often a whole division, to another firm or individual.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace, reflecting the value as perceived by the market participants.

Acquiring Firm

This is a company that purchases most or all of another company's shares to gain control over that company.