Which of the Following Conditions Is Most Likely to Cause

question 71

Multiple Choice

Which of the following conditions is most likely to cause fierce rivalry between competitors of an industry?

• A) Exit barriers in the industry are low
• B) Fixed costs in the industry are low
• C) Competitors are differentiated from each other
• D) Competition is based on the uniqueness of the industry's offerings
• E) The growth rate of demand for the industry's offerings is low

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Definitions:

Depreciation Rate

The percentage rate at which an asset is depreciated across its useful life, impacting how much of its cost is allocated as an expense each year.

Accelerated Depreciation

A method of depreciation in which an asset loses book value at a faster rate than the traditional straight-line method.

Depreciation Expense

The portion of the cost of a tangible fixed asset allocated as an expense to a period, reflecting the usage and wear and tear of the asset.

Asset's Life

The expected duration of time that an asset is considered to be useful for the purposes of a business.