Which of the Following Statements Concerning the Competitive Environment Is

question 66

Multiple Choice

Which of the following statements concerning the competitive environment is true?

• A) High fixed costs encourage firms to produce at a low level of capacity, in order to minimize fixed cost per unit produced.
• B) Low current prices relative to costs in an industry indicate low barriers to entry.
• C) Substantial economies of scale do not give a current industry member an advantage over a new firm.
• D) The ability to substitute another product limits the industry's profit potential.
• E) Buyers and suppliers do not influence the profitability of an industry.

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Definitions:

Acceptance

In contract law, the act of agreeing to an offer, thereby creating a binding contract.

Quasi-contract

An obligation imposed by law in the absence of an agreement to prevent unjust enrichment.

Freedom of Contract

The principle that individuals have the liberty to freely enter into agreements and contracts without undue government interference.

Creators’ Obligations

Duties and responsibilities that creators, such as authors, artists, and designers, owe to their clients, sponsors, or the public, which may include originality, quality, and copyright adherence.