Question

Understanding possible entry barriers is most important when analyzing which of the industry forces?

	Threat of competitive rivalry
	Threat of suppliers
	Threat of new entrants
	Threat of buyers
	Threat of substitutes

Which of the following is not a condition that makes suppliers of an industry more powerful?

	A) There are a high number of suppliers.
	B) The industry is not important to the supplier group.
	C) There are high switching costs for firms in the industry to switch from current suppliers.
	D) Suppliers products are highly differentiated from each other.

Which of the following is not a condition that leads buyer groups to have more bargaining power with firms in an industry?

	A) The industry's product is unimportant to the buyers' products/services.
	B) Buyers are earning low profits.
	C) There are large volume buyers.
	D) The products it purchases from the industry are highly differentiated.

For fiberglass insulation manufacturers, which of the following does NOT produce a substitute product?

	A) Cellulose insulation manufacturers
	B) Rock wool insulation manufacturers
	C) Fiberglass insulation manufacturers
	D) Styrofoam insulation manufacturers

Which of the following is not a condition that produces more rivalry within an industry?

	A) Fixed costs are high.
	B) The product/service is not highly differentiated.
	C) Industry growth is slow.
	D) Competitors are few in number.

Saved

Which of the following conditions increases rivalry within an industry?

	A) There are high switching costs for customers.
	B) Capacity is normally augmented in large increments.
	C) Exit barriers are low.
	D) Industry products are not very perishable.

Which of the following was not included as an example of an exit barrier?

	A) Highly differentiated products.
	B) Management's loyalty to a particular business.
	C) Very specialized assets.

Saved

Economies of scale refer to the phenomenon that as the volume of production increases, the _____ costs decrease.

	A) per unit
	B) total

Which of the following was not listed as an entry barrier?

Saved

In the economists' "perfectly competitive" industry, jockeying for position is unbridled and entry to the industry is very easy. This kind of industry structure offers the _____ prospect for long-run profitability.

	A) worst
	B) marginal
	C) limited
	D) best

Answer 1

Ans 1: Threat of new entrants

Ans 2: A) There are a high number of suppliers.

Ans 3: D) The products it purchases from the industry are highly differentiated.

Ans 4: C) Fiberglass insulation manufacturers

Ans 5: D) Competitors are few in number.

Ans 6: B) Capacity is normally augmented in large increments.

Ans 7: A) Highly differentiated products

Ans 8: A) per unit

Ans 9: A) worst