Monopolist Marketing Quiz

19 Questions | By Orsay | Last updated: Mar 19, 2022 | Total Attempts: 869

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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