Which of the following identifies the resources that can lead to a competitive advantage in competitive markets?

• A. Resources that are only used by monopolies
• B. Resources that are widely available and easily replicated
• C. Resources that have no impact on production costs
• D. Scarce and valuable resources that are difficult to imitate

Answer: (D)

Verified step by step guidance

1. Understand the concept of competitive advantage: It refers to the attributes or resources that allow a firm to outperform its competitors in the market.
2. Identify the characteristics of resources that can create a competitive advantage: These resources must be scarce (not widely available), valuable (contribute positively to production or market position), and difficult to imitate (competitors cannot easily replicate them).
3. Analyze why resources used only by monopolies do not necessarily lead to competitive advantage in competitive markets: Monopolies have unique market power, but in competitive markets, such exclusivity is rare or absent.
4. Recognize that resources that are widely available and easily replicated cannot sustain a competitive advantage because competitors can quickly copy them, eroding any advantage.
5. Conclude that the correct identification of resources leading to competitive advantage in competitive markets is those that are scarce, valuable, and difficult to imitate.