Question 1

All of the following entry methods provide firms with familiarity with a foreign market, expect which one?

Accepted Answer

Independent entry does not involve collaboration with local entities, thus providing less familiarity with the foreign market compared to joint ventures, partnerships, or mergers.

Question 2

Currently in the United States, resale price maintenance agreements________ illegal per se and ________judged using the rule of reason approach.

Accepted Answer

Resale price maintenance agreements are not illegal per se in the United States, meaning they are not automatically considered illegal. However, they are judged using the rule of reason approach, which considers various factors to determine whether the agreement is anticompetitive or not.

Question 3

If resale price maintenance leads to a shift in the market demand that equals the shift in the market supply, the quantity of the good sold will ________and the manufacturer's profit will ________.

Accepted Answer

If the shift in the market demand equals the shift in the market supply, it will result in a new equilibrium price and quantity that are the same as the original price and quantity. Therefore, the quantity of the good sold and the manufacturer's profit will not change.

Question 4

If resale price maintenance leads to a shift in the market supply that exceeds the shift in the market demand, the quantity of the good sold will ________and the manufacturer's profit will _________ .

Accepted Answer

If the shift in market supply exceeds the shift in market demand, it means there will be more supply of the product than demand for it in the market. This excess supply will result in a decrease in the quantity of the good sold. At the same time, if the manufacturer is enforcing resale price maintenance, they are setting a minimum price for the product, which may not be met by this excess supply. As a result, the manufacturer's profit will also decrease.

Question 5

If retailers have a resale price maintenance agreement with a manufacturer, competition forces successful retailers to provide product- specific services.

Accepted Answer

Retailers who have a resale price maintenance agreement with a manufacturer cannot compete only on price. They must provide other value-added services such as excellent customer service, knowledgeable staff, and unique shopping experiences to justify the higher prices they charge. Competition forces them to do so to remain successful.

Question 6

Offering product- specific services________ consumer demand and _________ the retailers' cost of selling the product.

Accepted Answer

The answer of Offering product- specific services________ consumer demand and...

Question 7

Offering product- specific services shifts the market demand for the product to the _________ and the market supply to the________ .

Accepted Answer

Offering product-specific services increases the value of the product for consumers, which shifts the market demand curve to the right. However, providing these services may also increase the cost of production, causing the market supply curve to shift to the left.

Question 8

Currently in the United States, the must examine the ________facts of each resale maintenance case using the________ .

Accepted Answer

The correct answer is that the lower courts must examine the specific facts of each resale maintenance case using the rule of reason approach. This approach assesses the reasonableness of a restraint based on its actual impact on competition, rather than deeming it automatically illegal.

Question 9

All of the following represent advantages or disadvantages of independent entry into a foreign market except which one?

Accepted Answer

The statement "Managers immediately gain familiarity with the foreign markets, laws, and traditions" is an advantage of independent entry into a foreign market. The other options represent advantages, such as retaining control and having all profits (or losses) reserved for the firm, or a lack of risk associated with divided interests.

Question 10

In order for resale price maintenance to increase the quantity of good sold, the shift in the market demand curve must be________ the shift in the market supply curve.

Accepted Answer

For resale price maintenance to increase the quantity of goods sold, the shift in the market demand curve must be more than the shift in the market supply curve. This is because a greater increase in demand compared to supply is necessary to raise the equilibrium quantity in the market.

Question 11

All of the following represent advantages or disadvantages of partnership with a foreign firm except which one?

Accepted Answer

The options A, B, and C represent advantages or disadvantages of partnership with a foreign firm, whereas Option D highlights complete control over operations, which is not a disadvantage of a partnership. Therefore, Option D does not represent an advantage or disadvantage of partnership with a foreign firm.

Question 12

It is not possible for an online retailer with no physical locations to free ride on other retailers' in- store product- specific services.

Accepted Answer

Online retailers may use in-store product-specific services provided by other retailers to inform their own business decisions, such as which products to carry or how to price them, without having to invest in those services themselves. This allows them to save money and resources, and therefore can be seen as a form of free-riding.

Question 13

The treatment of resale price maintenance in the European Union is the same as in the United States.

Accepted Answer

The treatment of resale price maintenance differs between the European Union and the United States. In the EU, resale price maintenance is generally considered a violation of competition laws and is prohibited, while in the US it is subject to a rule of reason analysis and may be lawful under certain circumstances.

Question 14

Young Faces Forever is a skin care company based in the United States that wants to enter the Japanese market. Suppose the managers of Young Faces are aware that there are significant social customs in Japan regarding skin products and these customs are unknown to the managers of Young Faces. All else equal, which of the following entry methods is the least likely to be successful for Young Faces?

Accepted Answer

Independent entry is the least likely to be successful because Young Faces does not have knowledge of the social customs in Japan regarding skin products. Without a local partner or joint venture, it would be difficult for Young Faces to navigate the market and understand the preferences of Japanese consumers. A merger would involve a much larger investment and carries significant risks, while a partnership or joint venture would allow Young Faces to leverage the expertise of a local company.

Question 15

Currently in the European Union, resale price maintenance agreements are .

Accepted Answer

Resale price maintenance agreements are considered a hardcore restriction on competition under EU competition law and are presumed to be illegal. This means that it is up to the supplier to prove that the agreement benefits consumers and does not restrict competition in order for it to be legally valid.

Question 16

A manufacturer's ultimate objective in specifying a minimum resale price is promotional.

Accepted Answer

The answer of A manufacturer's ultimate objective in specifying a...

Question 17

A manager of a firm based in the United States is interested in entering the Italian market. The manager is most concerned about maintaining total control over operations. Which of the following entry methods will best address the manager's concerns?

Accepted Answer

Independent entry, such as setting up a wholly owned subsidiary or establishing a branch, would provide the manager with the most control over operations. Partnership, joint venture, and master franchising would involve sharing control and decision-making with another party.

Question 18

If resale price maintenance leads to a shift in the market demand that exceeds the shift in the market supply, the quantity of the good sold will _________ and the manufacturer's profit will ________.

Accepted Answer

When resale price maintenance leads to a shift in market demand that exceeds the shift in market supply, it means that more consumers are willing to buy the product at a higher price, increasing the quantity sold. This increase in sales volume typically leads to an increase in the manufacturer's profit, as they are able to sell more units at a higher price.

Question 19

If retailers have a resale price maintenance agreement with a manufacturer, typically if the retailers charge a price above the specified minimum price, this will lower their profit.

Accepted Answer

If retailers charge a price above the specified minimum price, they will have to sell fewer units, which will lower their profit.

Question 20

To maximize profit, manufacturers should set the ________providing product- specific services.

Accepted Answer

To maximize profit, manufacturers should set the minimum price that still covers the costs of providing product-specific services. This strategy ensures they remain competitive while covering their expenses.

Quiz 13: Marketing Decisions: Advertising and Promotion

All of the following entry methods provide firms with familiarity with a foreign market, expect which one?

Currently in the United States, resale price maintenance agreements illegal per se and judged using the rule of reason approach.

If resale price maintenance leads to a shift in the market demand that equals the shift in the market supply, the quantity of the good sold will and the manufacturer's profit will .

If resale price maintenance leads to a shift in the market supply that exceeds the shift in the market demand, the quantity of the good sold will and the manufacturer's profit will _ .