Are we able to draw an inference about competitiveness of an industry from profitability? Or would we need more information to see the competitive level of an industry? Also, would the rate of return earned on capital be enough to infer the competitiveness of an industry or what other information would be needed?
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Even though industry profitability is one of the factors can that can be used to analyze the competitiveness of an industry, there are several other factors that needs to be analyzed as well, including the return earned on capital or ROI, number of firms in the industry, barriers to entry, industry growth rate, concentration ratio, government regulations, etc. We need to analyze all these factors simultaneously to ascertain the degree of ...
The expert draws an inference about competitiveness of an industry.