Monopolist Marketing Quiz

19 Questions | Total Attempts: 869

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Monopolist Marketing Quiz - Quiz

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Questions and Answers
  • 1. 
    What type of firm is one that is already operating in a particular market?
    • A. 

      Market leader

    • B. 

      Entrant

    • C. 

      Incumbent

    • D. 

      Market follower

    • E. 

      Monopolist

  • 2. 
    What is the term defined as the withdrad of a product from a market?
    • A. 

      Shut-down

    • B. 

      Exit

    • C. 

      Sale

    • D. 

      Removal

    • E. 

      Withdraw

  • 3. 
    What term represents the conduct and performance of firms in the market after entry has occured?
    • A. 

      Postentry competition

    • B. 

      Postentry actions

    • C. 

      Postentry procedures

    • D. 

      Postentry diversification

    • E. 

      Postentry strategic decisions

  • 4. 
    What type of entry exists if structural barriers are so high the incumbent need do nothing to deter entry?
    • A. 

      Deterred Entry

    • B. 

      Judo Entry

    • C. 

      Stealth Entry

    • D. 

      Accommodated Entry

    • E. 

      Blockaded Entry

  • 5. 
    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?
    • A. 

      Deterred Entry

    • B. 

      Judo Entry

    • C. 

      Stealth Entry

    • D. 

      Accommodated Entry

    • E. 

      Blockaded Entry

  • 6. 
    What type of entry exists if (1) the incumbent can keep the entrant out by employing an entry-deterring strategy and (2) employing the entry-deterring strategy boosts the incumbent's profits?
    • A. 

      Deterred Entry

    • B. 

      Judo Entry

    • C. 

      Stealth Entry

    • D. 

      Accommodated Entry

    • E. 

      Blockaded Entry

  • 7. 
    How can incumbents legally erect entry barriers around novel and nonobvious products or production processes?
    • A. 

      Collusive pricing

    • B. 

      Predatory pricing

    • C. 

      Patents

    • D. 

      Formation of a cartel

    • E. 

      Price fixing

  • 8. 
    Which of the following firms maintains a monopoly or cartel by controlling essential inputs thus creating a barrier to entry?
    • A. 

      DeBeers in diamonds

    • B. 

      Nike in shoes

    • C. 

      Pepsi in beverages

    • D. 

      Subway in sandwich fast food

    • E. 

      Levis in denim jeans

  • 9. 
    Which of the following is a potential risk of a brand umbrella?
    • 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

  • 10. 
    Which of the following is not an exit barrier for firms in an industry?
    • A. 

      Sunk costs

    • B. 

      Labor agreements or commitments to purchase raw materials

    • C. 

      Obligations to input suppliers

    • D. 

      Excess capacity

    • E. 

      Government restrictions

  • 11. 
    What term describes a market where a monopolist cannot raise price above long run average cost?
    • A. 

      Blockaded

    • B. 

      Perfectly contestable

    • C. 

      Accommodated

    • D. 

      Deterred

    • E. 

      Predatory

  • 12. 
    Wich of the following is a method a monopolist firm might use to prevent entry into a market?
    • A. 

      Limit pricing

    • B. 

      Predatory pricing

    • C. 

      Capacity expansion

    • D. 

      All of the above

    • E. 

      None of the above

  • 13. 
    Which of the following terms refers to the practice whereby an incumbent firm discourages entry by charging a low price before entry occurs?
    • A. 

      Limit pricing

    • B. 

      Price leading

    • C. 

      Predatory pricing

    • D. 

      Quality pricing

    • E. 

      Capacity expansion

  • 14. 
    What situation occurs if an incumbent firm with increasing marginal costs or limited capacity sets a price just below the entrants' marginal costs even though the incumbent may be unable to meet all market demand (or possibly may have to sacrifice its profits to do so)?
    • A. 

      Contestable limit pricing

    • B. 

      Strategic limit pricing

    • C. 

      Predatory pricing

    • D. 

      Quality pricing

    • E. 

      Capacity expansion

  • 15. 
    Which of the following methods is believed to be used by Brazilian cement makers to prevent entry into the market?
    • A. 

      Limit pricing

    • B. 

      Price leading

    • C. 

      Predatory pricing

    • D. 

      Quality pricing

    • E. 

      Capacity expansion

  • 16. 
    What situation occurs when a large incumbent sets a low price to drive smaller rivals from the market?
    • A. 

      Limit pricing

    • B. 

      Price leading

    • C. 

      Predatory pricing

    • D. 

      Quality pricing

    • E. 

      Capacity expansion

  • 17. 
    What term best describes the paradox which says despite the conclusion the predatory pricing to deter entry appears irrational, many firms are commonly perceived as slashing prices to deter entry?
    • A. 

      Cloud paradox

    • B. 

      Credit paradox

    • C. 

      Entry paradox

    • D. 

      Chain-store paradox

    • E. 

      Pricing paradox

  • 18. 
    What is the typical "capacity use" ratio as reported by plant managers to the U.S. Census of Manufacturers annually?
    • A. 

      40%

    • B. 

      50%

    • C. 

      60%

    • D. 

      70%

    • E. 

      80%

  • 19. 
    Which of the followings is not a condition under which an incumbent firm can successfully deter entry by holding excess capacity?
    • A. 

      The investment in excess capacity must be sunk prior to entry

    • B. 

      The incumbent should have a sustainable cost advantage

    • C. 

      Market demand growth should be slow

    • D. 

      The potential entrant should not itself be attempting to establish a reputation for toughness

    • E. 

      The excess capacity investment must be recoverable prior to entry

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