1. Firms in non-price competition differentiate themselves from their competition based on all of these EXCEPT:

price.

location.

style.

quality.

2. In the long run, the strength of the barriers to entry in a market have an impact on the _____ and the _____ in the market.

number of sellers; profit level

number of customers; number of sellers

fixed costs; number of substitute products

profit level; number of substitute products

3. Marta wants to open a shop specializing in gourmet candies and is having a difficult time finding space to rent in a location where many potential customers will pass by each day. There are only two possible locations that meet Marta's criteria, and several other types of businesses are vying to rent each location. This leads to high rents. What challenge to profitability is Marta facing as she starts her business?

the threat of competition from existing competitors

the threat of potential entrants

customers with bargaining power

suppliers with bargaining power

4. The costs of vertical integration include:

increased within-brand competition.

higher transaction costs.

reduced incentive for innovation.

increased risk of the hold-up problem.