Economics of Strategy CH.5

Which of the following is a reason other than concentration that price-cost margins may vary across industries

All of the above

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

Cross-price elasticity

Which of the following is not a characteristic of substitute products X and Y?

Customers are indifferent between X and Y

Which of the following is the definition of "competitors?

Firms whose strategic choices directly affect one another

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

Horizontal differentiation

What is defined by the number and size distribution of firms in the market?

Market Structure

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

Monopoly

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

Monopsonist

In what type of market do the actions of individual firms materially affect the overall market?

Oligopoly

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

Perfect competition