In a competitive market, the competitive power of a company's resource depends on:

• A. the total number of employees in the company
• B. the company's advertising budget
• C. how rare and difficult it is for competitors to imitate or substitute the resource
• D. the age of the company

Answer: (C)

Verified step by step guidance

1. Understand the concept of competitive power of a company's resource: It refers to how much advantage a company gains from a particular resource compared to its competitors.
2. Recognize that in microeconomics, a resource's competitive power is often linked to its uniqueness and the difficulty competitors face in replicating or substituting it.
3. Evaluate the options given: total number of employees, advertising budget, rarity and difficulty of imitation, and age of the company.
4. Recall the principle that resources which are rare and hard to imitate or substitute provide sustainable competitive advantage, as competitors cannot easily replicate them.
5. Conclude that the competitive power depends primarily on how rare and difficult it is for competitors to imitate or substitute the resource, rather than on size, budget, or age alone.