Question

Home Value Inc., Max Cart Inc., and Nice Necessities Inc. are three consumer-product retailing companies. Their products consist primarily of day-to-day items that are easy to imitate and sell. All three companies use the same resources and capabilities in the production and distribution of their products. Judging from the market conditions described in this scenario, which of the following statements is true?

A. Resource immobility of the firms will be low.
B. The industry structure will be far from perfect competition.
C. Barriers to entry within the industry will be high.
D. Any advantage that one firm has will be short-lived.

Answer 1

Any Advantage that one firm has will be short-lived ( D )

Step-by-step explanation:

Three consumer- product retailing companies producing and selling products that can be imitated by each other and each of the company use the same production techniques and resources means a very perfect market competition exists between the companies and even external companies willing to go into the production of the products because the Barriers to entry with the industry will be low as well.

Any new technique or resource acquired by any of the companies to better its production will be imitated by the other companies hence any advantage that one firm has will be short-lived.

Answer 2

Letter D is correct. Any advantage that one firm has will be short-lived.

Step-by-step explanation:

In this question, there are three retail consumer products companies that use the same resources and capabilities in the production and distribution of their products. Therefore, the most appropriate alternative that describes the market conditions of the scenario described in the question is the letter D, Any advantage of a company will be short-lived.

This is because if the three companies use the same resources and production and distribution capacities, as soon as any company has some kind of advantage, it would be strategically copied and reproduced by the other two companies, and therefore the advantage of one would be canceled.