Question 1

One goal a firm tries to achieve when it advertises a product is to
A)make the demand curve for the product more elastic.
B)shift the demand curve for the product to the left.
C)make the demand curve for the product unitary elastic.
D)make the demand curve for the product more inelastic.

Accepted Answer

The goal of advertising a product is to make the demand curve for the product more inelastic, meaning that consumers will be less responsive to changes in price. This allows the firm to charge a higher price and generate more revenue.

Question 2

Why would an organization as large as the National Football League (NFL)incur large legal expenses to try to prevent bars and restaurants from using their trademarked term "Super Bowl" in their advertising?

Accepted Answer

The answer of Why would an organization as large as...

Question 3

The most important of the factors that make a firm successful and that can be controlled by the firm's owners and managers are
A)the establishment of trademarks for its products and the aggressive defense of those trademarks.
B)lobbying government to erect or enforce entry barriers in its markets and the marketing of its products as widely as possible.
C)the differentiation of its products and the production of products at a lower average cost than competing firms.
D)the selection of the prices of its products and the selection of the most productive and loyal employees.

Accepted Answer

The differentiation of products and production at a lower average cost are key factors that give a firm a competitive advantage in the market. Establishing trademarks, marketing products widely, lobbying government to erect barriers to entry and selecting the prices of products are factors that may contribute to a firm's success but they are not as crucial as the ability to differentiate products and produce at lower costs than competitors. Selecting the most productive and loyal employees is important but it is not as significant as the other factors mentioned.

Question 4

In the highly competitive fast-food restaurant market, brand name restaurants have a strong profit incentive to maintain high sanitary conditions and avoid any negative consequences.

Accepted Answer

Brand name restaurants have a reputation to uphold and negative consequences such as foodborne illness outbreaks can severely damage their reputation, resulting in loss of customers and profits. Additionally, government regulations require all restaurants, regardless of brand name, to maintain high sanitary conditions to protect public health.

Question 5

What is the difference between the terms "marketing" and "advertising"?

Accepted Answer

The answer of What is the difference between the terms...

Question 6

Firms use two marketing tools to differentiate their products.What are these two tools?
A)lobbying and word of mouth
B)market research and demand estimation
C)brand management and advertising
D)consumer surveys and market experiments

Accepted Answer

Brand management and advertising are the two marketing tools that firms use to differentiate their products. Brand management involves creating a unique name, design, and image for a product to distinguish it from competitors, while advertising aims to inform and persuade potential customers to choose the brand over others.

Question 7

Which of the following can a firm use to defend a successful product's brand name?
A)The firm can obtain a patent on the brand name.
B)The firm can apply for a trademark to ban other firm's from using the product's name.
C)The firm can increase the amount it spends on advertising for the product.
D)The firm can attempt to copyright the brand name.

Accepted Answer

A trademark is a symbol, name, phrase, or design that identifies and distinguishes a product from those of other firms. By obtaining a trademark, a firm can legally prevent other firms from using that particular trademarked name or symbol. This is the best choice because it directly addresses the question of how to defend a brand name. The other options are not appropriate as patents are for inventions or processes, copyright is for creative works, and increasing advertising expenditure does not protect the brand name from infringement or misuse by other firms.

Question 8

Advertising is the action of a firm that is intended to maintain the differentiation of its product over time.

Accepted Answer

The answer of Advertising is the action of a firm...

Question 9

If buyers of a monopolistically competitive product feel the products of different sellers are strongly differentiated, then the demand for each seller's product is
A)perfectly inelastic.
B)perfectly elastic.
C)relatively inelastic.
D)relatively elastic.

Accepted Answer

The answer of If buyers of a monopolistically competitive product...

Question 10

When a firm has been granted a trademark, which grants legal protection against other firms using the name of the product that has been granted the trademark, the firm
A)still faces the possibility that the name will become widely used and no longer associated with a specific company.
B)does not have to worry about legally enforcing the trademark; this is the responsibility of the legal system.
C)still must apply for a copyright and a patent to ensure that no other firm will use the product's name.
D)must spend an annual amount on advertising the product each year; the amount it must spend is negotiated by the firm and the government agency that grants the trademark.

Accepted Answer

Even with legal protection, there is a risk that the name will become genericized, meaning it becomes so commonly used that it is no longer associated specifically with the firm that owns the trademark. Examples of this include Band-Aid, Kleenex, and Google. Companies must therefore work to maintain their brand identity and protect against the name becoming generic.

Question 11

Which of the following is an example of a factor that a firm's owners and managers can control in making the firm successful?
A)the ability to produce the product at a lower cost
B)changing consumer tastes
C)a rise in the price of a key input, for example, a rise in the price of oil leads to higher energy costs
D)the number of competitors in the market

Accepted Answer

The ability to produce the product at a lower cost is a factor that the firm's owners and managers can control through various strategies such as improving efficiency, reducing wastage, negotiating with suppliers, etc. Therefore, it can directly contribute to the firm's success. The other options (B, C, and D) are external factors that the firm has little or no control over.

Question 12

A firm that successfully differentiates its product or lowers its average cost of production creates
A)value for its customers.
B)entry barriers into its market.
C)a perfectly inelastic demand curve for its product.
D)economies of scale.

Accepted Answer

The answer of A firm that successfully differentiates its product...

Question 13

Draw a graph that shows the impact on a firm's profit when it increases spending on advertising and the increased advertising has no effect on the demand for a firm's product.

Accepted Answer

The answer of Draw a graph that shows the impact...

Question 14

A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated.How do these problems affect the innovating firm?
A)The firm is protected by a first-mover advantage: initial design flaws tend not to harm a firm significantly because consumers resist changing products for fear of incurring high switching costs.
B)They reduce profits for the new innovations and open the door to competitors who can enter the new market with a better product.
C)Because these design flaws were not anticipated, consumers tend to be more forgiving and are likely to remain loyal to the company and its products.
D)The firm's cost increases as it improves the product but it will not be able to raise its price for fear of alienating customers. Consequently, its profits will erode although its market share remains secure.

Accepted Answer

Design flaws or problems with a new product can reduce profits for the innovating firm and give a competitive advantage to other firms that can enter the market with a better product. This can result in a loss of market share and revenue for the innovating firm.

Question 15

Why are many companies concerned about brand management?

Accepted Answer

The answer of Why are many companies concerned about brand...

Question 16

A successful trademark is one that becomes a generic name for a product, for example, "Kleenex" has become a generic term for tissues.

Accepted Answer

The answer of A successful trademark is one that becomes...

Question 17

Discuss the role of product differentiation and advertising in monopolistic competition.

Accepted Answer

The answer of Discuss the role of product differentiation and...

Question 18

Article Summary
Several hotel companies have begun catering to pet owners by marketing their pet-friendly policies to pet owners, creating pet-friendly rooms, and offering various hospitality programs and amenities for pet lovers. Klimpton Hotels does not change extra for pets of any size, offers room amenities such as pet beds, food and water bowls, and provide information about pet-friendly attractions in the area. Choice Hotels has over 3,000 pet-friendly locations worldwide and offers travel tips for pet owners. W Hotels accepts pets less than 40 pounds, provides owners with information about local dog parks, and also provides pet beds, food bowls, and ID tags for their 4-legged guests. Travel sites such as TripAdvisor, Expedia, Travelocity, and PetFriendly.net are also joining the trend by helping pet owners identify pet-friendly hotels and offering reviews of various accommodations.
Source: Dave Spector, "Pet-Friendly Hotels Getting A Paw Up On The Competition," mediapost.com, November 24, 2014.
-Refer to the Article Summary above.By marketing to pet owners, hotel companies like Klimpton, Choice, and W are trying to set themselves apart from competing hotel companies.This is an example of
A)defending a brand name.
B)blocking entry into the market.
C)legally enforcing a trademark.
D)product differentiation.

Accepted Answer

The hotel companies are differentiating themselves from their competitors by offering pet-friendly policies and amenities, which appeals to pet owners.

Question 19

Marketing refers to all the activities necessary for a firm to sell a product to a consumer.

Accepted Answer

Marketing includes a range of activities such as advertising, promotion, public relations, and sales in order to generate demand and promote the sale of a product or service to consumers.

Question 20

Recent research has shown that the first firm to enter a market often does not have a long-term advantage over later entrants into the market.An example that has been used to illustrate this is
A)McDonald's entry into the high-end coffee market.
B)Xerox, which became a generic term for making photocopies.
C)Abercrombie and Fitch, which was the first clothing company to market to young men.
D)the introduction of the first ballpoint pen in 1945.

Accepted Answer

The answer of Recent research has shown that the first...

Quiz 13: Monopolistic Competition: the Competitive Model in a More Realistic Setting

One goal a firm tries to achieve when it advertises a product is to

Why would an organization as large as the National Football League (NFL)incur large legal expenses to try to prevent bars and restaurants from using their trademarked term "Super Bowl" in their advertising?

The most important of the factors that make a firm successful and that can be controlled by the firm's owners and managers are

In the highly competitive fast-food restaurant market, brand name restaurants have a strong profit incentive to maintain high sanitary conditions and avoid any negative consequences.

What is the difference between the terms "marketing" and "advertising"?

Firms use two marketing tools to differentiate their products.What are these two tools?

Which of the following can a firm use to defend a successful product's brand name?

Advertising is the action of a firm that is intended to maintain the differentiation of its product over time.

If buyers of a monopolistically competitive product feel the products of different sellers are strongly differentiated, then the demand for each seller's product is

When a firm has been granted a trademark, which grants legal protection against other firms using the name of the product that has been granted the trademark, the firm

Which of the following is an example of a factor that a firm's owners and managers can control in making the firm successful?

A firm that successfully differentiates its product or lowers its average cost of production creates

Draw a graph that shows the impact on a firm's profit when it increases spending on advertising and the increased advertising has no effect on the demand for a firm's product.

A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated.How do these problems affect the innovating firm?

Why are many companies concerned about brand management?

A successful trademark is one that becomes a generic name for a product, for example, "Kleenex" has become a generic term for tissues.

Discuss the role of product differentiation and advertising in monopolistic competition.

Marketing refers to all the activities necessary for a firm to sell a product to a consumer.

Recent research has shown that the first firm to enter a market often does not have a long-term advantage over later entrants into the market.An example that has been used to illustrate this is