In a competitive market, which of the following best describes a rival company employing a focused strategy?

• A. A company merging with competitors to form a monopoly
• B. A company offering standardized products to the entire market
• C. A company setting prices below marginal cost to drive out competitors
• D. A company targeting a specific market segment with specialized products

Answer: (D)

Verified step by step guidance

1. Understand the concept of a 'focused strategy' in microeconomics, which refers to a firm's approach to target a specific market segment or niche rather than the entire market.
2. Recognize that a rival company employing a focused strategy aims to serve a particular group of customers with specialized products or services tailored to their needs.
3. Compare the options given: merging to form a monopoly relates to market power, offering standardized products targets the whole market, and setting prices below marginal cost is a predatory pricing strategy, none of which describe a focused strategy.
4. Identify that the option describing a company targeting a specific market segment with specialized products aligns with the definition of a focused strategy.
5. Conclude that the best description of a rival company employing a focused strategy is one that concentrates on a particular market segment with specialized offerings.