Describes The Differentiation Of A Product Quiz

20 Questions | Total Attempts: 930

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Business Management Quizzes & Trivia

With many products being produced that meet the same consumer needs there is a growing benefit for a business to differentiate their products so that they may be more attractive to a prospective consumer. The quiz below describes the differentiation of a product. Give it a try and see how well you fair.


Questions and Answers
  • 1. 
    Which U.S. agency is responsible for preventing anticompetitive conduct?
    • A. 

      Securities and Exchange Commission

    • B. 

      Department of Justice

    • C. 

      Office of Fair Trading

    • D. 

      Competition Commission

    • E. 

      Competition Authority

  • 2. 
    What criterion developed by the DOJ is used to identify all potential competitors within the market?
    • A. 

      Market competition criterion

    • B. 

      DOJ competition criterion

    • C. 

      SSNIP criterion

    • D. 

      SIC criterion

    • E. 

      DOJ market criterion

  • 3. 
    Which of the following is not a characteristic of substitute products X and Y?
    • A. 

      They have the same or similar product performance characteristics

    • B. 

      They have the same or similar occasions for use

    • C. 

      They are solid in the same geographic market

    • D. 

      Customers are indifferent between X and Y?

    • E. 

      A price increase of X while keeping the Y's price constant leads to a drop in purchases of X and an increase in purchases of Y

  • 4. 
     What empirical method generally is used to measure the degree to which products substitute for each other?
    • A. 

      Cross-price elasticity

    • B. 

      Price-comparison

    • C. 

      Relatedness factor

    • D. 

      Standard Industrial Classification

    • E. 

      SSNIP

  • 5. 
    What is a catchment area?
    • A. 

      The area of a firm’s customers as defined by traditional county lines

    • B. 

      The area a firm’s customers shops due to idiosyncratic reasons

    • C. 

      The area a firm operates in which it has no competition

    • D. 

      The area where a firms customer will go to shop in the event the firm were to raise prices

    • E. 

      The contiguous area from which a firm draws most of its customers

  • 6. 
    What is defined by the number and size distribution of the firms in a market?
    • A. 

      Herfindahl index

    • B. 

      Market share

    • C. 

      Market structure

    • D. 

      SSNIP

    • E. 

      Numbers-equivalent of firms

  • 7. 
    Which of the following market structures generally has a Herfindahl index at .6 and above (usually having light competition, unless threatened by entry)?
    • A. 

      Perfect competition

    • B. 

      Monopolistic competition

    • C. 

      Oligopoly

    • D. 

      Monopoly

    • E. 

      N-firm

  • 8. 
    In what type of market structure to sellers set identical prices and are prices generally driven down to marginal costs?
    • A. 

      Perfect competition

    • B. 

      Monopolistic competition

    • C. 

      Oligopoly

    • D. 

      Monopoly

    • E. 

      Diversified

  • 9. 
    What term describes a firm that faces little or no competition in one of its input markets?
    • A. 

      Monopolist

    • B. 

      Monopsonist

    • C. 

      Oligopolist

    • D. 

      Oligopsonist

    • E. 

      Cartelist

  • 10. 
    What term describes the differentiation of a product when it is unambiguously better or worse than competing products?
    • A. 

      Horizontal differentiation

    • B. 

      Vertical differentiation

    • C. 

      Idiosyncratic differentiation

    • D. 

      Spatial differentiation

    • E. 

      Non-price differentiation

  • 11. 
    What term describes the differentiation of a product when only some consumers prefer it to competing products (holding price equal)?
    • A. 

      Horizontal differentiation

    • B. 

      Vertical differentiation

    • C. 

      Idiosyncratic differentiation

    • D. 

      Spatial differentiation

    • E. 

      Non-price differentiation

  • 12. 
    What group/type preferences describes when tastes differ markedly from one person to the next and result in horizontal differentiation?
    • A. 

      Search preferences

    • B. 

      Horizontal preferences

    • C. 

      Consumer preferences

    • D. 

      Spatial preferences

    • E. 

      Idiosyncratic preferences

  • 13. 
    Of the following industries listed, which one is generally thought of as having the highest search costs?
    • A. 

      Consumer packaged goods

    • B. 

      Electronics

    • C. 

      Physician service

    • D. 

      Automotive

    • E. 

      Apparel

  • 14. 
    In what type of market do the actions of individual firms materially affect the overall market?
    • A. 

      Perfect competitive

    • B. 

      Monopolistically competitive

    • C. 

      Oligopoly

    • D. 

      Monopoly

    • E. 

      Diversified

  • 15. 
    What kind of competition is generally described as quantity competition?
    • A. 

      Bertrand competition

    • B. 

      Cournot competition

    • C. 

      Perfect competition

    • D. 

      Chamberlin competition

    • E. 

      Monopolistic competition

  • 16. 
    What kind of competition is generally described as price competition?
    • A. 

      Bertrand competition

    • B. 

      Cournot competition

    • C. 

      Perfect competition

    • D. 

      Chamberlin competition

    • E. 

      Monopolistic competition

  • 17. 
    The average PCM (percentage contribution margin) in a Cournot equilibrium is given by the formula PCM=H/η, where H is the Herfindahl index and η is the price elasticity of market demand.  Given this equation, which of the following statements is true?
    • A. 

      The more concentrated the industry, the smaller the PCMs in equilibrium

    • B. 

      The industry concentration only raises the PCMs in equilibrium

    • C. 

      The industry concentration has no bearing on PCM size in equilibrium

    • D. 

      The less concentrated the industry, the larger the PCMs in equilibrium

    • E. 

      The less concentrated the industry, the smaller the PCMs in equilibrium

  • 18. 
    What terms does Sutton use to describe the costs of establishing a credible brand?
    • A. 

      Brand investment

    • B. 

      Cost of brand establishment

    • C. 

      Cost of advertisement

    • D. 

      Endogenous sunk cost

    • E. 

      Market establishment cost

  • 19. 
    Which of the following is a reason other than concentration that price-cost margins may vary across industries?
    • A. 

      Accounting practices

    • B. 

      Regulation

    • C. 

      Product differentiation

    • D. 

      Nature of sales transactions

    • E. 

      All of the above

  • 20. 
    Based on Bresnahan and Reiss's study of the relationship between concentration and prices, how many firms did they determine generally need to be in a market for price competition to be as intense as it would likely get?
    • A. 

      1

    • B. 

      2

    • C. 

      3

    • D. 

      4

    • E. 

      5

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