The basic premise of industry analysis is that
A)competition can be assessed between monopoly and perfect competition within the spectrum of industry structures.
B)the level of profitability within an industry is largely determined by the industry structure.
C)the internal variables of the firm determine a firm's performance within the industry.
D)profits are squeezed by powerful suppliers.

Question

Quizplus · Accepted Answer

Industry analysis assumes that the level of profitability within an industry is largely determined by the industry structure. It looks at factors such as the number and size distribution of competitors, barriers to entry, the degree of product differentiation, and the bargaining power of suppliers and buyers. Factors external to the firm are considered more important in determining firm profitability than internal variables. The premise of industry analysis is not focused on assessing competition between monopoly and perfect competition or the power of suppliers.

The Basic Premise of Industry Analysis Is That