Ch19_Guan CM_AISE TB - Chapter 19Pricing and Profitability...

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Unformatted text preview: Chapter 19Pricing and Profitability Analysis MULTIPLE CHOICE 1. Which of the following is NOT an example of a market structure? a. oligopoly b. monopoly c. barrier market d. perfectly competitive ANS: C PTS: 1 OBJ: 19-1 2. Which type of expenses does a monopoly usually incur that are different from the other types of mar- ket structures? a. marketing costs such as advertising, positioning, discounting and coupons b. costs of differentiation such as advertising, rebates, coupons c. no special expenses d. legal and lobbying expenditures ANS: D PTS: 1 OBJ: 19-1 3. Which of the following is true regarding expenses related to specific market structure types? a. Monopolistic competition and oligopolies are the only structures where costs of differenti- ation have an impact. b. Both monopolies and monopolistic competition structures normally must expend legal and lobbying costs. c. In perfect competition and monopolistic competition, differentiation costs have an impact. d. In perfect competition and oligopolies, there are no special expenses related to the struc- ture of the organization. ANS: A PTS: 1 OBJ: 19-1 4. Market Structure Type # of firms in in- dustry Barriers to entry Uniqueness of product Perfect Competition Many (a) Not unique Monopolistic Competi- tion (b) Some unique features Oligopoly Few (c) Monopoly Very High (d) Fill in the correct responses for the blanks with letters: a. (a)very low, (b)many, (c)high, (d)very unique b. (a)very low, (b)few, (c)high, (d)not unique c. (a)very high, (b)few, (c)low, (d)fairly unique d. (a)low, (b)one, (c)high, (d)very unique ANS: A PTS: 1 OBJ: 19-1 5. Monopolistic competition is best defined as: a. a structure that has many buyers and sellers, but the products are differentiated on some basis. b. a structure where customers are willing to pay a little more for the unique feature that ap- This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. peals to them. c. a structure that combines perfect competition and monopoly, but is closer to a competitive situation. d. all of the above are true ANS: D PTS: 1 OBJ: 19-1 6. Which of the following markets is characterized by the following: many buyers and sellers, a homo- geneous product, easy entry into and exit from the industry, and all firms are price takers? a. perfectly competitive market b. monopolistic competition c. monopoly d. oligopoly ANS: A PTS: 1 OBJ: 19-1 7. Which of the following markets is characterized by the following: only a few firms in the industry, a fairly unique product, difficult entry into the industry, and spending for differentiation of the product?...
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This note was uploaded on 01/19/2012 for the course ACC 3302 taught by Professor Pence during the Fall '10 term at University of Houston - Downtown.

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Ch19_Guan CM_AISE TB - Chapter 19Pricing and Profitability...

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