Which of the following are considered part of competitive forces in economics?

• A. Technological innovation unrelated to the market
• B. Government budget deficits
• C. Natural disasters
• D. Rivalry among existing firms

Answer: (D)

Verified step by step guidance

1. Understand the concept of competitive forces in economics, which typically refer to factors that directly influence the level of competition within a market or industry.
2. Recall Michael Porter's Five Forces framework, which identifies the main competitive forces as: rivalry among existing firms, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, and threat of substitute products or services.
3. Analyze each option to see if it fits into these competitive forces: Technological innovation unrelated to the market does not directly affect competition within the market; government budget deficits are macroeconomic factors, not direct competitive forces; natural disasters are external shocks, not competitive forces.
4. Identify that 'Rivalry among existing firms' is a core competitive force because it directly affects how firms compete for market share, prices, and customer loyalty.
5. Conclude that among the given options, only 'Rivalry among existing firms' is considered part of the competitive forces in economics.