Which of the following is true?
A)Industry structure determines firm conduct which in turn determines firms' performance
B)Industry structure determines firm performance which in turn determines firms' conduct
C)Industry conduct determines firm structure which in turn determines firms' performance
D)Industry performance determines firm conduct which in turn determines firms' structure

Question

Quizplus · Accepted Answer

Industry structure refers to the characteristics of the market such as the number of competitors, barriers to entry, and product differentiation. The structure influences how firms behave, such as pricing strategies and investment decisions, which ultimately affects their performance. Hence, A is the correct answer as it shows the causal chain of effects from industry structure to firm conduct and then to performance.

Which of the Following Is True