CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

Which condition, in general, gives industry participants more pricing power?
A. Overcapacity industry
B. Concentrated industry
C. Industry with low entry barriers
Explanation: Overcapacity leads to price-cutting and a very competitive environment.

User Contributed Comments 4

User Comment
Shaan23 I honestly was fine with AN for all sections but hate it for this unit.

With concentration there's companies that are [ ] with high pricing power and companies that are [ ] with low pricing power.

I thought none of these answers was correct.
floydbite i feel ur pain
GBolt93 Yes, but in general high concentration leads to high pricing. The other two never lead to high pricing power.
khalifa92 @shaan23 the book says concentration gives high pricing power but there are exceptions like for those companies with high exit barriers they cant risk with their prices like Boeng.
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