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According to a recent study of European industrial exporters, companies that utilized independent distributors would be most likely to utilize ______________?

User Otognan
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Final answer:

Companies that utilize independent distributors, like independent truckers, most likely embrace elements of perfect competition. These aspects can increase consumer choice and competitive pressure in the marketplace.

Step-by-step explanation:

According to a recent study of European industrial exporters, companies that utilized independent distributors would be most likely to utilize perfect competition characteristics in their business model. Independent truckers fall into this category as they are small and numerous, require minimal assets to start other than a truck and a commercial driver's license, and can easily enter or exit the market by buying or selling their truck. This simplicity of entry and exit, along with the homogenous nature of the service they provide, aligns them with the model of perfect competition. Perfect competition influences firms' behaviors and profits, as independent truckers must take the going rate for their services, akin to price takers in a perfect competition scenario.

Moreover, with respect to international trade, a small economy can benefit from economies of scale while also enjoying the perks of competition and variety due to several producers. A small economy, which might otherwise be supplied by a few large domestic producers, gains access to a larger variety of goods and competitive prices when engaging in international trade. This is exemplified by looking at the automotive industry, where larger factories across the globe can distribute to smaller countries, providing the consumers in those countries with more choices and better prices, which can spur on innovation and competitive pressure.

When discussing the gains from international trade, it is often argued that smaller economies stand to gain more relative to their size because they are able to access goods and technologies otherwise unavailable in their domestic market. International trade can enable small economies to take full advantage of comparative advantage, slicing up the value chain, or economies of scale. In contrast, without international trade, consumer choice and competition would be greatly limited.

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