In the context of microeconomics, what is the primary objective of a competitive strategy for a firm?

• A. Eliminate all forms of competition
• B. Minimize consumer surplus
• C. Achieve a sustainable advantage over rivals
• D. Maximize government intervention in the market

Answer: (C)

Verified step by step guidance

1. Understand that a competitive strategy in microeconomics refers to the plan a firm uses to gain an edge over its competitors in the market.
2. Recognize that eliminating all forms of competition is generally not feasible or legal in most markets due to antitrust laws and market dynamics.
3. Know that minimizing consumer surplus is not a typical objective of firms; consumer surplus represents the benefit consumers receive, and firms usually focus on maximizing their own profits.
4. Identify that maximizing government intervention is not a goal of firms' competitive strategies, as firms typically prefer less intervention to operate more freely.
5. Conclude that the primary objective of a competitive strategy is to achieve a sustainable advantage over rivals, meaning the firm aims to maintain a long-term position that competitors find difficult to replicate or surpass.