Which of the following statements is true about the characteristics of a highly competitive industry _____
A) they have low fixed costs for entering or leaving the industry
B) there are high degrees of product differentiation
C) there are few competitors
D) there tend to be more firms seeking competitive advantage

Question

Quizplus · Accepted Answer

In highly competitive industries, there tend to be more firms seeking competitive advantage in order to gain an edge over their competitors. Option A is false because low fixed costs would make it easier for firms to enter and exit the industry quickly, leading to increased competition. Option B is false because high degree of product differentiation would create monopolistic competition, not highly competitive markets. Option C is false because few competitors would create oligopolies, not highly competitive industries.

Which of the Following Statements Is True About the Characteristics