The rivalry among competing firms tends to be more intense
A) when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals.
B) when the products/services of rival sellers are strongly differentiated and buyer demand is strong.
C) when rivals are relatively content with their market position.
D) when there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members.
E) the smaller the number of firms in the industry and the more unequal their market shares.

Question

Quizplus · Accepted Answer

When demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals, the competition tends to be more intense as each company tries to gain a larger market share. This is because the market is not growing fast enough to accommodate all the players, the buyers can easily switch between brands, and any advantage gained by one company can be easily offset by its rivals.

The Rivalry Among Competing Firms Tends to Be More Intense