The "Rules of the Game, " the Set of Conditions

question 154

Multiple Choice

The "rules of the game, " the set of conditions that shape individual incentives and constraints, are determined by

• A)the production possibilities frontier
• B)scarcity
• C)technology
• D)the amount of consumer goods in the economy
• E)laws about resource ownership and the role of government

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Definitions:

Industry Profitability

Industry profitability is a measure of the average income and margins businesses within a specific sector can expect to earn.

Competitive Rivalry

The ongoing, competitive struggle between companies in the same industry or market to win over customers, increase market share, and achieve dominant status.

Substitute Products

Goods or services that can be used in place of each other, offering consumers an alternative choice.

Economies Of Scale

Refers to the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.