What is typically the main goal when companies concentrate on a single industry?

• A. To diversify their product offerings
• B. To minimize their exposure to industry-specific risks
• C. To achieve specialization and increase efficiency
• D. To reduce competition in unrelated markets

Answer: (C)

Verified step by step guidance

1. Understand the concept of specialization in microeconomics, which refers to focusing resources and efforts on a narrow range of activities or products to improve efficiency.
2. Recognize that when companies concentrate on a single industry, their main goal is to leverage their expertise, skills, and resources to produce goods or services more efficiently than if they spread themselves across multiple industries.
3. Note that diversification and minimizing exposure to industry-specific risks are strategies that involve operating in multiple industries, which is the opposite of concentrating on a single industry.
4. Realize that reducing competition in unrelated markets is not typically a goal of focusing on one industry, since the company is not entering those markets at all.
5. Conclude that the primary objective of concentrating on a single industry is to achieve specialization and increase efficiency, which can lead to cost advantages and better quality products.