Solved >   26.The decline in unit costs of a:1430398 …

 

26.The decline in unit costs of a product that occurs as the absolute volume of production increases is known as

a.factor analysis.

b.industry economies.

c.economies of scope.

d.None of the above.

 

27.Switching costs are incurred by

a.the buyer.

b.the seller.

c.both the buyer and the seller.

d.neither the buyer nor the seller.

 

28.Barriers to entry may be associated with

a.cost advantages associated with the quantity of production.

b.cost advantages independent of size.

c.Both A & B

d.Neither A nor B

 

29.Pressure from substitute products occurs from

a.inside the industry.

b.primary competitors.

c.primary and secondary competitors.

d.None of the above.

 

 

30.When an industry’s customers are hesitant to negotiate for lower prices, the

a.bargaining power of buyers is high.

b.bargaining power of suppliers is high.

c.bargaining power of buyers is low.

d.bargaining power of suppliers is low.

 

31.Which of the following does not increase the bargaining power of buyers?

a.Buyers face few switching costs.

b.Buyers earn high profits.

c.Products that the buyer purchase represent a significant percentage of the buyers’ costs.

d.Buyers have the ability to engage in backward integration.

 

32.When firms that provide key raw materials to an industry constantly negotiate for higher prices, the

a.bargaining power of buyers is high.

b.bargaining power of suppliers is high.

c.bargaining power of buyers is low.

d.bargaining power of suppliers is low.

 

33.Which of the following does not increase the bargaining power of suppliers?

a.An abundance of substitute products

b.Built-in switching costs among the suppliers’ products

c.Domination of the supplying industry by a few competitors.

d.All of the above increase the bargaining power of suppliers.

 

34.Which of the following is not a limitation of Porter’s five-forces model?

a.It is based on the assumptions of industrial organization theory.

b.It does not allow for the role of partnerships.

c.It does not account for the fact that a large firm may be able to influence industry structure.

d.It assumes that firm resources explain firm performance.

 

35.Which of the following is not a limitation of Porter’s five-forces model?

a.It does not account for the fact that a large firm may be able to influence industry structure.

b.It assumes that industry structure explains firm performance.

c.It incorporates the resource-based perspective on strategic decision-making.

d.It is based on the assumptions of industrial organization theory.

 

 

 

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