Several factors can create intense rivalry among firms.These factors include all of the following factors except:
A)firms focus on market share at the expense of others.
B)firms feel pressure due to fixed costs and produce at full capacity.
C)lack of differentiation in products and services.
D)upward pressure on prices and profitability.
E)absence of switching costs for customers.

Question

Quizplus · Accepted Answer

The correct answer is D) upward pressure on prices and profitability. Intense rivalry among firms is typically characterized by factors that increase competition and reduce profit margins, such as focusing on market share, high fixed costs leading to full capacity production, lack of differentiation, and low switching costs for customers. Upward pressure on prices and profitability would actually reduce rivalry, as firms would be less aggressive in their competitive strategies if they were experiencing higher profits and could increase prices without losing market share.

Several Factors Can Create Intense Rivalry Among Firms