Under Which of the Following Conditions Will Companies with Low

question 45

Multiple Choice

Under which of the following conditions will companies with low market share be most likely to fail?

• A) competing in a slow-growth industry
• B) competing in an industry that makes frequently purchased items
• C) competing in an industry with few product changes
• D) competing in an industry requiring market power and economies of scale
• E) competing in none of these industries

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Definitions:

Shift

In economics, a change in the position of a demand or supply curve which reflects a change in conditions other than price.

Adverse Supply Shock

A sudden and significant decrease in the supply of a good or service, which typically leads to an increase in prices and can temporarily boost inflation.

Short-run Phillips Curve

A graphical representation showing the inverse relationship between the level of unemployment and the rate of inflation in an economy over the short-term.

Inflation

The degree of uptick in the universal valuation of goods and services, weakening purchase potency.