Ch. 16 Business Strategy HW

when it is difficult for customers to assess quality prior to consuming a product, they tend to rely on ______ as an indicator of quality. A. informative advertising B. persuasive advertising C. new experiences D. brand reputation

D. brand reputation

which of the following is NOT a way to differentiate a product? A. Charge a lower price than other companies for a given product B. Add features to a product C. Provide different types of customer service for a product D. Change the quality of a product

A. charge a lower price than other companies for a given product

a business owner spends on advertising with the intent that it will affect demand for the company's product in what two ways? A. decreasing the company's demand and making its demand more inelastic. B. increasing the company's demand and making its demand more inelastic. C. decreasing the company's demand and making its demand more elastic. D. increasing the company's demand and making its demand more elastic.

B. increasing the company's demand and making its demand more inelastic

which of the following is NOT an example of a relationship-specific investment that could result in a hold-up problem? A. buying customized equipment to produce output to the specifications of a major customer. B. organizing the layout of a factory for the most efficient flow of the production line. C. training employees in the same computer system and programming used by customers to simplify transfer of data D. locating a factory near a major supplier of inputs.

B. organizing the layout of a factory for the most efficient flow of the production line

barriers to entry _______ existing businesses ______. A. protect; from price wars B. expose; to competitive pressures C. expose; to limited pools of customers D. protect; from competition by new entrants

D. protect; from competition by new entrants

a company will be subject to price competition if _____________ A. other producers are selling in the product market. B. barriers to entry reduce the number of firms participating in the product market. C. customers view its product as the same as or very similar to the products of rival companies. D. there is successful product differentiation in the product market.

c. customers view its product as the same as or very similar to the products of rival companies.

vertical integration occurs in a merger when the companies that merge ______________ A. produce different types of products, such as one producing a service and the other a tangible good. B. are different sizes, with one being significantly larger than the other. C. had a buyer-seller relationship prior to the merger, with each covering a different stage in a production chain. D. each produce different products whose productions are unrelated but are consumed together

c. had a buyer-seller relationship prior to the merger, with each covering a different stage in a production chain