Why are suppliers in a competitive upstream market said to have “indirect power”?
a) They can sell their services to the lowest bidder
b) They are always concentrated
c) Their customers are always locked into relationships with them
d) The price they charge never depends on supply and demand in the upstream market
e) The can sell their services to the highest bidder
Which of the following is not a method a firm could use to force vertical foreclosure?
a) Downstream monopolist acquires upsteam supplier and refuses to buy from other
suppliers
b) Upsteam monopolist acquires downstream firm and refuses to sell to other
downstream firms
c) Competitive downstream firm acquires upstream monopolist and refuses to sell to
downstream firms
d) Upstream competitor acquires downstream competitor and refuses to buy from other
suppliers
e) Competitive upstream firm acquires downstream monopolist and refuses to buy from
other suppliers
What term best refers to fundamental changes that lead to major shifts of competitive
positions in a market?
a) Jump
b) Shock
c) Alteration
d) Bolt
e) Shift
Which of the following types of fit (used to aide in coordination along all dimensions of
production) explains a situation where the steps of a particular process must occur in a
particular order?
a) Timing fit
b) Size fit
c) Color fit
d) Sequence fit
e) Price fit
What step of Ghemawat’s framework for analyzing commitment intensive choices
involves analyzing whether the firm’s commitment is likely to result in a product market
position in which the firm delivers superior benefits to consumers or operates with
lower costs than competitors?
a) Positioning analysis
b) Sustainability analysis
c) Flexibility analysis
d) Judgment analysis
e) Final Commitment analysis
What is another term for a ‘win-win’ business opportunity?
a) Economic profit
b) Excess total surplus
c) Gains from trade
d) Consumer surplus excess
e) Benefit – Benefit transaction
What is the perceived benefit of a product per unit consumed minus the product’s
monetary price?
a) Value creation
b) Competitive advantage
c) Consumer surplus
d) Maximum willingness-to-pay
e) Value chain
What type of isolating mechanisms impedes existing firms and potential entrants from
duplicating the resources and capabilities that form the basis of the firm’s advantage?
a) Scarce
b) Imperfectly mobile
c) Early-mover advantages
d) Impediments to imitation
e) Cospecialized
Which of the following statements is least true regarding institutions?
a) Institutions can involve formal regulation of firms by governmental agencies
b) Institutions can involve formal regulation of firms by nongovernmental regulatory
organizations
c) Institutions can be less formal and involve ongoing power/dependence relationships
between firms
d) Institutional arrangements may embody general patterns of values, beliefs, ad
behavioral norms that motivate and stabilize affected firms
e) None of the above
When is predatory pricing a most effective entry barrier?
a) When the incumbent has incurred them and the entrant has not
b) When incumbents have long-standing relationships with suppliers and customers
c) When channels are few and hard to replicate
d) When a firm has a reputation for toughness or competes in multiple markets
e) When marginal costs are low and flooding the market causes large price reductions
What term best describes a set of values, beliefs, and norms of behavior shared by a
firm’s members that influence employee preferences and behaviors?
a) Codes
b) Routines
c) Culture
d) Influence
e) Mind-sets
Which of the following represents total surplus in t he value creation equation, (B-P) +
(P-C)?
a) B + C
b) P + C
c) B – C
d) P – C
e) None of the above
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