chapter 3 pt 2
the telecommunication industry of United Canavais primarily dominated by three large firms: AD Telecom Inc., Mystic Telecom Corp., and Total Talk Inc. Instead of cutting prices competitively, these firms have resorted to non-price competition through branding and product differentiation. Which of the following industry competitive structures are these companies most likely in?
oligopoly
Competitive rivalry based solely on _____ is destructive to firms as it transfers most of the value created in the industry to the customers.
price cutting
Which of the following best illustrates a firm operating in a monopolistically competitive industry?
An automobile manufacturer uses branding, pricing, and superior advertising to differentiate itself from a large number of other automobile manufacturers.
Which of the following statements accurately brings out the difference between monopolistic competition and oligopoly?
In monopolistic competition, many firms compete against each other; in an oligopoly, there are few large firms competing against each other
In the smartphone industry, Google is a complementor to Samsung. Which of the following statements best explains why this is true?
Samsung's smartphones increase in value when they are preinstalled with Google's Android system.
which of the following situations is the power of suppliers high in an industry?
Suppliers' industry is more concentrated than the industry it sells to.
While Burger Cult Inc. operates in a monopolistically competitive industry, Citizen Telecom Inc. operates in a monopoly. Keeping this information in mind, which of the following statements is most likely true?
The threat of new entrants will be higher for Burger Cult Inc. than Citizen Telecom Inc
Shield Autos Inc. has newly launched a luxury car into the European market. Which of the following would most likely not be a complement to the car?
a premium car manufactured and sold by Mova Autos Inc., a rival company
A key feature of an oligopoly is that the competing firms
are interdependent
Which of the following strategies will be most detrimental to firms that are close rivals operating in an oligopolistic industry structure?
competition against each other through price cutting
A company is best described as a _____ to an existing company if customers value the existing company's product or service offering more when they are able to combine it with the other company's product or service.
complementer
Industry convergence is a process whereby
formerly unrelated industries begin to satisfy the same customer need.
In an industry, the rivalry among existing competitors is high when
incumbent firms are highly committed to the business.
Corner Market Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Corner Market has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate?
monopolistic competition
In Rozinia Republic, the federal government owns and manages all the nuclear power plants. This is because the business would not be profitable if there was more than one supplier in the nuclear power industry. Which of the following industry competitive structures does the scenario best illustrate?
natural monopoly
Eon Inc., ElectraviaInc., and FC Inc., the three largest firms in the consumer electronics industry, hold close to 85% of the industry's market share. These companies mainly compete against each other by providing unique features in their products rather than pricing them low. These firms are interdependent, and each firm must consider the strategic actions of its competitors. Which of the following industry competitive structures does this scenario best illustrate?
oligopoly
Why do firms operating in a monopolistically competitive industry have the power to raise the prices of their products?
the firms can differentiate their product offerings
