Final answer:
The resource-based model of above-average returns emphasizes a firm's internal valuable resources as the source of its competitive advantage, not external factors, government regulations, or market demand.
Step-by-step explanation:
The resource-based model of above-average returns suggests that the foundation for a firm's competitive advantage is derived from valuable resources it possesses. Unlike approaches that focus on external factors or market demand, this model emphasizes the firm's internal capabilities and assets, such as intellectual property, organizational processes, or technology, which can provide a sustainable competitive advantage over competitors. Government regulations, while important, act as a backdrop to the economic activity by enforcing contracts and promoting competition, but they do not serve as the primary source of competitive advantage for a firm as per this model.