Question $1$

$1$

Point

True or False: Sometimes the best action that a firm can take to increase its own profits will also increase its rivals$$ profits as well.

True

False

Question $2$

$1$

Point

In which of the following cases can we be highly confident that the industry environment will be $$favorable$,$ and thus, that industry average profits will not be below average for the economy overall?

If all of the Five Forces are strong.

If two or more of the Five Forces are strong.

If none of the Five Forces is strong.

If only one of the Five Forces is strong.

Question $3$

$1$

Point

Which of the following best describes the way to use Five Forces analysis to understand how changes in the world are likely to affect an industry$$s average level of profitability?

Consider the issue that may change industry structure and then ask how it affects each of the Five Forces. Then, synthesize the analyses of the Five Forces and draw a conclusion about how the change is likely to affect industry profits overall.

Industry rates of profits are pretty much fixed and do not vary, even if industry environments change.

Focus on only one force that might be affected by the issue that may change industry structure and assess whether it increases or decreases industry average profits.

Industry rates of profits change regularly, but we cannot use Five Forces analysis to understand how changes in the world are likely to affect an industry$$s average level of profitability.

Question $4$

$1$

Point

True or False: In many cases, important events may change how business is done, but might not affect industry average profits.

True

False

Question $5$

$1$

Point

True or False: If some of the forces are strong and some are weak, we can be confident that there will be no profits in the industry.

True

False