Question 1

Which of the following is a potential risk of a brand umbrella?

Accepted Answer

A) The brand umbrella reduces the incumbents sunk cost of introducing a new product 
B) The umbrella brand may help the incumbent navigate the vertical chain 
C) The brand umbrella allows an incumbent offset uncertainty about the quality of a new product 
D) A brand umbrella may make suppliers and distributors more willing to enter relationship specific investments in or sell credit to incumbents 
E) If a new product under the umbrella fails,consumers may become disenchanted with the entire brand 
A) The brand umbrella reduces the incumbents sunk cost of introducing a new product 
B) The umbrella brand may help the incumbent navigate the vertical chain 
C) The brand umbrella allows an incumbent offset uncertainty about the quality of a new product 
D) A brand umbrella may make suppliers and distributors more willing to enter relationship specific investments in or sell credit to incumbents 
E) If a new product under the umbrella fails,consumers may become disenchanted with the entire brand

Question 2

Which of the following terms refers to the practice whereby an incumbent firm discourages entry by charging a low price before entry occurs?

Accepted Answer

A) Limit pricing 
B) Price leading 
C) Predatory pricing 
D) Quality pricing 
E) Capacity expansion 
A) Limit pricing 
B) Price leading 
C) Predatory pricing 
D) Quality pricing 
E) Capacity expansion

Question 3

Which of the following best describes an incumbent firm?

Accepted Answer

A) One that just recently entered a market 
B) One that just exited a market 
C) One that faces no competition in its market 
D) One that is already operating in a particular market 
E) None of the above 
A) One that just recently entered a market 
B) One that just exited a market 
C) One that faces no competition in its market 
D) One that is already operating in a particular market 
E) None of the above

Question 4

What term describes when a firm sells a combination of goods and services at a price below what the individual items would cost?

Accepted Answer

A) Packaging 
B) Combining 
C) Bundling 
D) Mixing 
E) Assembling 
A) Packaging 
B) Combining 
C) Bundling 
D) Mixing 
E) Assembling

Question 5

How can incumbents legally erect entry barriers around novel and non-obvious products or production processes?

Accepted Answer

A) Collusive pricing 
B) Predatory pricing 
C) Patents 
D) Formation of a cartel 
E) Price fixing 
A) Collusive pricing 
B) Predatory pricing 
C) Patents 
D) Formation of a cartel 
E) Price fixing

Question 6

What term describes when a firm sells a combination of goods and services together,but not individually?

Accepted Answer

A) Packaging 
B) Combining 
C) Bundling 
D) Mixing 
E) Assembling 
A) Packaging 
B) Combining 
C) Bundling 
D) Mixing 
E) Assembling

Question 7

Which of the following generally accompanies firms that survive as market entrants?

Accepted Answer

A) Precipitous growth 
B) Lower marginal costs than incumbents 
C) Higher average revenue than incumbents 
D) Small size allowing fast decision making 
E) None of the above 
A) Precipitous growth 
B) Lower marginal costs than incumbents 
C) Higher average revenue than incumbents 
D) Small size allowing fast decision making 
E) None of the above

Question 8

When is predatory pricing a most effective entry barrier?

Accepted Answer

A) When the incumbent has incurred them and the entrant has not 
B) When incumbents have long-standing relationships with suppliers and customers 
C) When channels are few and hard to replicate 
D) When a firm has a reputation for toughness or competes in multiple markets 
E) When marginal costs are low and flooding the market causes large price reductions 
A) When the incumbent has incurred them and the entrant has not 
B) When incumbents have long-standing relationships with suppliers and customers 
C) When channels are few and hard to replicate 
D) When a firm has a reputation for toughness or competes in multiple markets 
E) When marginal costs are low and flooding the market causes large price reductions

Question 9

Which of the following firms maintains a monopoly or cartel by controlling essential inputs thus creating a barrier to entry?

Accepted Answer

A) DeBeers in diamonds 
B) Nike in shoes 
C) Pepsi in beverages 
D) Subway in sandwich fast food 
E) Levis in denim jeans 
A) DeBeers in diamonds 
B) Nike in shoes 
C) Pepsi in beverages 
D) Subway in sandwich fast food 
E) Levis in denim jeans

Question 10

What type of firm is one that is already operating in a particular market?

Accepted Answer

A) Market leader 
B) Entrant 
C) Incumbent 
D) Market follower 
E) Monopolist 
A) Market leader 
B) Entrant 
C) Incumbent 
D) Market follower 
E) Monopolist

Question 11

What term describes a situation where two or more parties expend resources battling each other?

Accepted Answer

A) Predatory pricing 
B) War of attrition 
C) Dumping 
D) Capacity Expansion 
E) Puppy Dog Ploy 
A) Predatory pricing 
B) War of attrition 
C) Dumping 
D) Capacity Expansion 
E) Puppy Dog Ploy

Question 12

What is the term defined as the withdrawal of a product from a market?

Accepted Answer

A) Shut-down 
B) Exit 
C) Sale 
D) Removal 
E) Withdrawal 
A) Shut-down 
B) Exit 
C) Sale 
D) Removal 
E) Withdrawal

Question 13

Which of the following methods is believed to be used by Brazilian cement makers to prevent entry into the market?

Accepted Answer

A) Limit pricing 
B) Price leading 
C) Predatory pricing 
D) Quality pricing 
E) Capacity expansion 
A) Limit pricing 
B) Price leading 
C) Predatory pricing 
D) Quality pricing 
E) Capacity expansion

Question 14

What term describes a market where a monopolist cannot raise price above long run average cost?

Accepted Answer

A) Blockaded 
B) Perfectly contestable 
C) Accommodated 
D) Deterred 
E) Predatory 
A) Blockaded 
B) Perfectly contestable 
C) Accommodated 
D) Deterred 
E) Predatory

Question 15

What type of entry exists if structural entry barriers are low,and either (1)entry-deterring strategies will be ineffective or (2)the cost to the incumbent of trying to deter entry exceeds the benefits it could gain from keeping the entrant out?

Accepted Answer

A) Deterred Entry 
B) Judo Entry 
C) Stealth Entry 
D) Accommodated Entry 
E) Blockaded Entry 
A) Deterred Entry 
B) Judo Entry 
C) Stealth Entry 
D) Accommodated Entry 
E) Blockaded Entry

Which of the following is a potential risk of a brand umbrella?

Which of the following terms refers to the practice whereby an incumbent firm discourages entry by charging a low price before entry occurs?

Which of the following best describes an incumbent firm?

What term describes when a firm sells a combination of goods and services at a price below what the individual items would cost?

How can incumbents legally erect entry barriers around novel and non-obvious products or production processes?

What term describes when a firm sells a combination of goods and services together,but not individually?

Which of the following generally accompanies firms that survive as market entrants?

When is predatory pricing a most effective entry barrier?

Which of the following firms maintains a monopoly or cartel by controlling essential inputs thus creating a barrier to entry?

What type of firm is one that is already operating in a particular market?

What term describes a situation where two or more parties expend resources battling each other?

What is the term defined as the withdrawal of a product from a market?

Which of the following methods is believed to be used by Brazilian cement makers to prevent entry into the market?

What term describes a market where a monopolist cannot raise price above long run average cost?

What type of entry exists if structural entry barriers are low,and either (1)entry-deterring strategies will be ineffective or (2)the cost to the incumbent of trying to deter entry exceeds the benefits it could gain from keeping the entrant out?

The Power of Principles: A Historical Perspective

The Horizontal Boundaries of the Firm

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, Power, and Culture

Economics Primer

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Exam 6: Entry and Exit

Which of the following is a potential risk of a brand umbrella?

Which of the following terms refers to the practice whereby an incumbent firm discourages entry by charging a low price before entry occurs?

Which of the following best describes an incumbent firm?

What term describes when a firm sells a combination of goods and services at a price below what the individual items would cost?

How can incumbents legally erect entry barriers around novel and non-obvious products or production processes?

What term describes when a firm sells a combination of goods and services together,but not individually?

Which of the following generally accompanies firms that survive as market entrants?

When is predatory pricing a most effective entry barrier?

Which of the following firms maintains a monopoly or cartel by controlling essential inputs thus creating a barrier to entry?

What type of firm is one that is already operating in a particular market?

What term describes a situation where two or more parties expend resources battling each other?

What is the term defined as the withdrawal of a product from a market?

Which of the following methods is believed to be used by Brazilian cement makers to prevent entry into the market?

What term describes a market where a monopolist cannot raise price above long run average cost?

What type of entry exists if structural entry barriers are low,and either (1)entry-deterring strategies will be ineffective or (2)the cost to the incumbent of trying to deter entry exceeds the benefits it could gain from keeping the entrant out?

The Power of Principles: A Historical Perspective

The Horizontal Boundaries of the Firm

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Information and Value Creation

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, Power, and Culture

Economics Primer

Filters