an industry is described as a group of firms

Step 1: Analyze the question The question asks for the definition of an industry in Economics.

Step 2: Explain the concept In Economics, a firm is a single business organization that produces goods or services. An industry is a collection of firms that produce the same or similar products. For example:

• All the firms producing cement in Nigeria (Dangote Cement, BUA Cement, Lafarge) make up the cement industry.
• All the banks make up the banking industry.
• All the firms that make bottled drinks make up the beverage industry.

What defines an industry is the type of product or service the firms produce, not the number of jobs they provide or the technology they use.

Step 3: Evaluate the options

• A. Provides jobs for many people: Employment size does not define an industry. Wrong.
• B. Uses advanced technology in production: Technology level is not the defining feature. Wrong.
• C. Produces similar products: This is the standard definition of an industry. Correct.
• D. Provides jobs for few people: Again, employment size is not the criterion. Wrong.

Step 4: Answer

Exam tip: Remember the ladder: Firm = one business; Industry = many firms producing similar products; Sector = a broad group of industries (such as primary, secondary, tertiary). Whenever you see "industry" in a definition question, look for the words "similar" or "same" products.