Question

The level of direct competition in the hardwood furniture industry can best be described as

A) low because of the numerous firms in the industry and the slowing growth rate.
B) low because of the slowing growth rate and the competition from composite wood furniture.
C) high because of the numerous firms in the industry and the slowing growth rate.
D) moderate because the slowing growth rate offsets the numerous firms in the industry.

Answer 1

The hardwood furniture industry experiences high competition due to many firms and slow growth, which forces firms to vigorously compete. Similar competitive dynamics are found in the smartphone and fast-fashion industries.

Step-by-step explanation:

The level of direct competition in the hardwood furniture industry would be considered high because of the numerous firms in the industry and the slowing growth rate. As numerous firms vie for market share in a slowing industry, they likely compete more intensely on price, quality, and other differentiators. Other examples of industries with high competition include the smartphone industry and the fast-fashion industry, where companies continuously introduce new products at competitive prices to gain an edge over rivals.

Moreover, high competition often results in firms innovating to differentiate their products or to reduce costs. Meanwhile, firms in less competitive industries, such as monopolies or oligopolies, face less pressure to innovate or adjust pricing strategies.