A Company Wants to Determine How Industry Effects Have Affected

question 35

Multiple Choice

A company wants to determine how industry effects have affected its profitability.Which of the following elements should the company focus on?

• A) the barriers to entry and exit within the industry
• B) the pricing method opted by the managers to face competition within the industry
• C) the brand strategy the managers adopt to establish the firm in the industry
• D) the strategic position the firm pursues within the industry

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Definitions:

Distortionary Tax

A tax that causes people to alter their behavior and economic decisions from what they would have chosen in the absence of the tax.

Principle of Neutrality

The concept that certain measures, such as fiscal policies, should be designed to have a neutral effect on economic choices and competition.

Economic Decisions

Choices made by individuals, businesses, or governments regarding the allocation of scarce resources to satisfy needs and desires.

Excess Burden

The loss of economic efficiency that occurs when a tax or government policy distorts consumer behavior or market outcomes, leading to a decrease in total welfare.