Identify the statement that best describes the role of advertising in a competitive industry. 0 A single rm in a competitive market will advertise to increase its sales. 0 When a rm in a perfectly competitive industry invests in advertising, that rm must have different expectations than the rest of the market about future demand. 0 Firms in a competitive market advertise because they sell a differentiated good. 0 A single rm paying for advertising reduces its average total cost. 0 In a competitive industry, trade associations may advertise to increase overall demand in the market. Label each of the statements as either true or false. Each label can be used more than once. Informative advertising can include information about price, quality, and/or Answer Bank availability. True False When a company spends a lot on advertising it is signaling that it expects that" its product will be successful in the marketplace. Advertising as part of the product includes information about price, quality, and availability. Advertising as part of the product is used to persuade us to consume the good or service with little or no information about the product.Business Strategy - End of Chapter Problem Apple's supply chain (the chain of companies from which Apple purchases parts and manufacturing labor) includes over 200 different companies, including some of their own competitors such as LG and Samsung. Suppose that Apple is considering vertical integration in order to limit or eliminate the bargaining power of its suppliers. Identify each item that represent a danger of vertical integration. Your suppliers may have a comparative advantage in producing specific products that will be difficult to achieve with vertical integration. Vertical integration may blunt the incentive to keep your costs low. Vertical integration is likely to increase transaction costs. Vertical integration may make your company more likely to experience a hold-up problem. Fewer relationship-specific investments are made when companies vertically integrate.Business Strategy End of Chapter Problem In Apple's iconic "Get a Mac" advertising campaign, one older actor, dressed in a poortting suit and glasses, portrayed a windows PC and a younger actor, dressed in fashionable casual clothes, portrayed a Mac. a. A Mac is a search good because 0 the average consumer spends a long time searching for a computer before making a purchase decision. 0 it is possible to search for all the information needed to make a purchase decision. 0 the Apple store makes it easy to search for the right computer for your needs. 0 consumers are searching for a more userfriendly computer. b. In the Get a Mac advertising campaign, Apple is using - advertising strategy. Business Strategy End of Chapter Problem You want to open a coffee shop. After doing some market research, you believe that people equally value two things when deciding which coifee shop to go to. First, they value convenience, with lots of coffee-based drink options. Second, they value highquality coffee with space available for studying, work, or meetings. There is already one coffee shop, Kwik Koffee, in the area where you want to open your coffee shop. Kwik Koifee has a drive-through window, very limited seating, and a large menu of different types of coffee. The accompanying spectrum depicts the diiference in consumer preferences for coiTee shops and the location of the existing rm in the market. Assume that consumers are equally distributed along the spectrum, so thatjust as many consumers prefer the convenient option to the high-quality option to anywhere in the middle. Point K represents the location of Kwik Koffee on the spectrum. Move point A to the place on the spectrum you should Move point B to the place on the spectrum you should position your coffee shop if you are only interested in position your coffee shop if your only concern is that Kwik capturing the largest number of customers in the coifee Koffee can undercut your prices when you open. market. A B O O K OOO Convenient With large menu High quality with studyfwork space