Question

1. Economies of scale can arise from:

a. cost reductions gained through decreased production.

b. high prices on bulk purchases of raw material inputs and component parts.

c. an advantage gained by spreading fixed production costs over a large production volume.

d. increased spending on marketing and advertising activities.

e. poor production operations.

Question 12

1. An industry's buyers have high bargaining power when:

a. they purchase in small quantities.

b. switching costs are low.

c. it is economically impossible for them to purchase an input from several companies at once.

d. the supply industry depends upon buyers for a very small percentage of its total orders.

e. the industry is a monopoly.

Question 13

1. Many beverage manufacturers are noticing that sales for bottled water and fruit-based beverages is increasing compared to carbonated drinks because customers are increasingly becoming health conscious. This change in customer preferences can be attributed to which of the following factors of the macroenvironment?

a. Economic forces

b. Technological forces

c. Social forces

d. Demographic forces

e. Political forces

Question

1. When shopping for clothing such as shirts and jeans, Tyrone only buys products from Eastern Clothing Company even if there are several other companies that offer similar products at lower prices. Tyrone's preference for Eastern Clothing Company demonstrates:

a. bargaining power.

b. risk of entry.

c. lack of economies of scale

d. lack of demand.

e. brand loyalty.

Question 15

1. Which of the following is a difference between the bargaining power of buyers and the bargaining power of suppliers?

a. Buyers bargaining power can raise costs by demanding better quality, while suppliers can raise costs by providing lower quality products.

b. Only suppliers have the ability to make demands based on their power relative to that of the company.

c. Buyers have the most bargaining power in a monopoly, while suppliers need multiple product substitutes to have bargaining power.

d. A powerful buyer lower costs, while suppliers raise costs to squeeze profits out of an industry.

e. The potential of a supplier with strong bargaining power is considered a threat, while a buyer with strong bargaining power does not pose a threat to the industry.

Question 16

1. As an industry enters the shakeout stage:

a. demand grows at a high rate.

b. new entrants come into the market.

c. excess productive capacity emerges.

d. rivalry among companies declines.

e. prices of products increase.

Question?

1. Which of the following is a benefit of innovation in an industry?

a. It increases the barriers to entry to reduce rivalry and competition.

b. It breaks the life cycle pattern and causes growth so rapid it causes stages to be skipped altogether.

c. It emphasizes the importance of industry structure.

d. It allows smaller companies the ability to compete with large, established companies by reducing entry barriers and lowering fixed costs of production.

e. It secures the profitability of strategic groups within an industry.

Question 18

1. Which of the following statements correctly describes potential competitors in an industry?

a. They usually have an absolute cost advantage over established companies.

b. They are usually encouraged by established companies.

c. They threaten the profitability of established companies.

d. They find it easier to enter an industry when the entry barriers are high.

e. They find it easier to enter an industry when established companies have economies of scale.

Question 19

1. Americans are currently living longer now than in the past because of advances in medicine. As a result, the sale of products that meet the needs of older individuals, such as devices that assist in walking and movement, have increased. In the context of an industry's macroenvironment, age is considered which type of force?

a. Technological

b. Social

c. Legal

d. Demographic

e. Political

Question?

1. Suppliers in an industry are most powerful when:

a. there are few substitutes for the products that they sell.

b. switching costs are low.

c. companies in the industry threaten to enter the suppliers' industry.

d. their profitability is significantly affected by the purchases of companies in a particular industry.

e. they refrain from entering their customers' industry because of lack of resources.