Which of the Following Is a Predictable Competitive Response to High

question 18

Multiple Choice

Which of the following is a predictable competitive response to high initial prices?

• A) Competition has an incentive to enter the market
• B) Competition will stay out of the market because your product quality must be high
• C) Competing companies may report you for price gouging
• D) Competition will offer radically different products

---

Definitions:

Urbanized

Characterized by or pertaining to regions that are densely populated with humans and typically have a lot of developed infrastructure.

Heckscher-Ohlin Model

An economic theory that explains international trade in terms of differences in the relative endowments of factors of production among nations, suggesting that countries will export goods that make intensive use of locally abundant factors.

Comparative Advantage

The ability of an individual, company, or country to produce a good or service at a lower opportunity cost than competitors.

Labor-Intensive

A term describing a process or industry that requires a large amount of labor to produce its goods or services as compared to the amount of capital required.