Question

The rivalry among competing sellers in an industry intensifies

a) When buyer demand for the product is growing rapidly.

b) When customers are brand loyal and their costs of switching to competing brands or substitute products are relatively high.

c) When buyer demand is strong and sellers have little or no excess capacity and only minimal inventories.

d) As the number of rivals increases and as they become more equal in size and competitive capability.

Answer 1

The rivalry among competing sellers in an industry intensifies due to growing buyer demand, brand loyalty with high switching costs, and an increase in the number of rivals.

Step-by-step explanation:

The rivalry among competing sellers in an industry intensifies when:

1. Buyer demand for the product is growing rapidly. This is because an increase in demand can attract more sellers who want to take advantage of the higher sales potential.
2. Customers are brand loyal and their costs of switching to competing brands or substitute products are relatively high. This is because loyal customers are less likely to switch to another brand, increasing the intensity of competition among sellers.
3. The number of rivals increases and as they become more equal in size and competitive capability. When there are more competitors of similar strength, the competition becomes more intense as each one tries to gain an advantage over the others.

These factors contribute to a more competitive environment among sellers, which can lead to innovation, lower prices, and higher quality for consumers.