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Discuss the Importance of Knowing Your Firm's Strengths and Weaknesses

question 42

Essay

Discuss the importance of knowing your firm's strengths and weaknesses and what opportunities and threats exist in the external environment.


Definitions:

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences in a way that maximizes utility.

External Benefits

Advantages that result from a product or service's use that affect someone other than the direct consumer or producer, often justifying government intervention.

Consumption

The process by which goods and services are used by households and individuals, leading to a decrease in their availability.

Negative Externalities

Negative effects or costs that are incurred by third parties as a result of economic activities, for which they are not compensated, such as pollution.

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