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Samsung and Google cooperate as complementors to compete against Apple's strong position in the mobile device industry, while at the same time Samsung and Google are increasingly becoming competitive with one another.This scenario best illustrates the process of:


A) co-opetition
B) perfect competition
C) monopolization
D) conglomeration

E) A) and C)
F) All of the above

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Mention some of the recent technological innovations in the U.S.service industry.

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Technological factors capture the applic...

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What is a natural monopoly? Provide a real world example.

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Student answers will vary.In some instan...

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Which of the following do the sociocultural forces in a firm's external environment best represent?


A) The interest rates prevalent in an economy
B) The laws protecting small enterprises in a nation
C) The family size of the firm's target market
D) The rate of employee attrition within the firm

E) A) and B)
F) C) and D)

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What is meant by near monopolies?

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Near monopolies are firms that have accr...

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Which of the following statements accurately brings out the difference between monopolistic competition and an oligopoly?


A) Sellers in an oligopoly provide highly differentiated products; in monopolistic competition, the products sold are undifferentiated or standardized.
B) In an oligopoly, the number of buyers is large; in monopolistic competition, the number of buyers is limited to three or four.
C) Firms in an oligopoly have no pricing power; firms in a monopolistically competitive industry have the ability to raise prices.
D) In monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other.

E) All of the above
F) B) and C)

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First Ledger Inc., an auditing company, replaced its existing accounting software with new accounting software from another supplier.Since the new software has different features and abilities, First Ledger Inc.has had to spend $10,000 on training its employees to use it.In this scenario, $10,000 represents First Ledger Inc.'s _____.


A) opportunity cost
B) switching cost
C) octroi charge
D) excise duty

E) A) and C)
F) A) and B)

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Balmia Ammunition Inc., a firm controlled and managed by the government of Balmia, is the only company that has the license to produce defense arms in the country.Which of the following industry competitive structures does this best illustrate?


A) Monopolistic competition
B) Monopoly
C) Oligopoly
D) Perfect competition

E) All of the above
F) B) and C)

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Beans Inc.operates in a perfectly competitive agricultural industry.Classica Apparel Inc., in contrast, operates in a monopolistically competitive industry.Keeping this information in mind, which of the following statements is true?


A) Beans Inc. will face competition from many sellers, whereas Classica Apparel Inc. will be the only seller in the market.
B) While Classica Apparel Inc. will have the power to set the prices for its products, Beans Inc. will have little or no ability to do so.
C) Beans Inc. will have many buyers for its products, whereas Classica Apparel Inc. will have very few buyers for its products.
D) While Beans Inc. will communicate the degree of product differentiation through advertising, Classica Apparel Inc. will need no advertising.

E) None of the above
F) A) and D)

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When is the bargaining power of buyers high?

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The bargaining power of buyers is high w...

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A firm's strategic position is likely to be strong when:


A) the entry barriers within the industry it operates in are low and the exit barriers are high.
B) its suppliers and vendors can easily forward integrate and buyers can backward integrate.
C) all the five forces in Porter's model are strong.
D) the gap between the value the firm's product generates and the cost to produce it is large.

E) A) and C)
F) A) and B)

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When companies that manufacture shipping containers want to buy iron ore, the purchase decision is solely based on price.This is because there are a large number of sellers in the iron ore industry, and iron ore is a highly undifferentiated commodity.Which of the following industry competitive structures does the iron ore industry best illustrate?


A) Monopoly
B) Oligopoly
C) Perfect competition
D) Monopolistic competition

E) A) and C)
F) B) and C)

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Demand for traditional fast-food providers such as McDonald's, Burger King, and Wendy's has been on a decline in recent years.Consumers have become more health conscious and demand has shifted to alternative restaurants like Subway, Chick-fil-A, and Chipotle.Attempts by McDonald's and Wendy's to steal customers from one another include frequent discounting tactics such as dollar menus.Such competitive actions are indicative of _____.


A) profitability increases
B) perfect competition
C) natural monopolies
D) cut-throat competition

E) C) and D)
F) A) and D)

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Which of the following is a drawback of Porter's five forces model?


A) The model describes competition narrowly as a firm's closest competitors.
B) Managers cannot determine the changing speed of an industry or the rate of innovation.
C) It fails to provide a basis for deriving implications for a firm's strategic position within an industry.
D) The model fails to consider that threat of substitutes can come from outside a given industry.

E) B) and D)
F) A) and B)

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Earlier, the travel industry was controlled by a few large travel companies that booked holidays, air tickets, bus tickets, and hotels for their customers.However, with the emergence of the Internet, smaller travel agencies started mushrooming in the industry and customers started making their own reservations.Which of the following can be inferred from this information?


A) The travel industry changed from a consolidated structure to a fragmented one.
B) The pricing power of the incumbent firms in the travel industry has increased.
C) The bargaining power of buyers in the travel industry has decreased.
D) The structure of the travel industry changed from monopolistic competition to an oligopolistic one.

E) A) and B)
F) A) and C)

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List the five macroeconomic factors that can affect a firm's strategy.

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Economic factors in a firm's external en...

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In regard to any of the five forces that shape competition, it is important to note that their relative strengths are context-dependent.Elaborate on this statement with the help of a real world example.

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Student answers will vary.In regard to a...

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Competitive rivalry based solely on _____ is destructive to firms as it transfers most of the value created in the industry to the customers.


A) price-cutting
B) new product releases
C) promotional campaigns
D) product differentiation

E) B) and C)
F) None of the above

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In the aircraft manufacturing industry, at least for large commercial jets, Boeing and Airbus are the only competitors.There is not a significant threat of entry because:


A) entering the aircraft manufacturing industry requires huge capital investments.
B) there is expected to be a huge return on investment within this industry.
C) there is no credible threat of retaliation from the incumbents.
D) entering the aircraft manufacturing industry means violating government policies.

E) B) and C)
F) A) and D)

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Curry Rush is a premium Asian restaurant chain that differentiates itself from a large number of competitors by providing exclusively organic Vietnamese cuisine.It has some pricing power because it provides differentiated products and therefore, has some entry barriers in place.In this scenario, Curry Rush is most likely operating in a(n) _____.


A) oligopoly
B) monopoly
C) perfectly competitive industry
D) monopolistically competitive industry

E) A) and B)
F) A) and C)

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