Question 1

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

Accepted Answer

The differentiation of products and the production of products at a lower average cost than competing firms are two primary factors that can be controlled by a firm's owners and managers. These factors allow the firm to establish a competitive advantage and sustain it over time, leading to long-term success. The other options listed may be important, but they are either limited in their scope or rely heavily on external factors outside of the firm's control.

Question 2

Figure 13-9 
-Refer to Figure 13-9.Which of the graphs in the figure above reflects the decline in sales that Starbucks experienced as a result of increased competition from companies like McDonald's and Dunkin' Donuts.Assume that as a result of the competition,Starbucks began to experience an economic loss.

Accepted Answer

Panel C likely shows a decline in sales due to increased competition, leading to an economic loss, as it would depict a leftward shift in the demand curve or a downward shift in the price level, reflecting reduced revenue.

Question 3

In a monopolistically competitive market,a successful new restaurant

Accepted Answer

In a monopolistically competitive market, there is free entry for new firms, which leads to zero economic profit in the long run. However, because of product differentiation, restaurants can offer different versions of the same product, leading to competition. Therefore, a successful new restaurant will earn zero economic profit in the long run but may still be able to differentiate its products to attract customers.

Question 4

Being the first to sell a particular good can give a firm advantages over other firms that sell similar products.What is the name given to these advantages?

Accepted Answer

The advantages gained by being the first to sell a particular good are commonly referred to as "first-mover advantages". This can include brand recognition, establishing customer loyalty, securing distribution channels, and setting industry standards.

Question 5

________ describes the actions a firm takes to maintain the differentiation of its product over time.

Accepted Answer

Brand management involves taking actions to maintain the differentiation of a product over time. It includes strategies such as maintaining consistent product quality, developing brand loyalty, and protecting the brand's image through advertising and public relations efforts. Product differentiation refers to the unique features or characteristics of a product that distinguish it from its competitors. Advertising and aggressive marketing can be a part of brand management, but they are not the sole components.

Question 6

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

Accepted Answer

A trademark is the best choice for protecting a brand name. A trademark is a symbol, word, or phrase that identifies a specific product and sets it apart from competitors' products. By obtaining a trademark, a firm can legally prevent others from using the same or a similar name for their products, thereby protecting the brand name. A patent is not applicable for a brand name as it relates to a product or service, not an invention. Copyrights are also not applicable for brand names as they protect original artistic, literary, and musical works. Increasing advertising spends may help with brand awareness but it does not legally protect the brand name from being used by competitors.

Question 7

If Starbucks is successful at luring away competitors' customers with its chain of health and wellness stores,what will be the effect on Starbucks' demand and marginal revenue curves?

Accepted Answer

If Starbucks successfully attracts competitors' customers, its demand curve will shift to the right due to increased demand for its products. Consequently, the marginal revenue curve will also shift to the right as it is derived from the demand curve.

Question 8

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

Accepted Answer

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

Question 9

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

Accepted Answer

While a trademark does provide legal protection, there is still a risk that the name may become so widely used that it loses its association with a specific company. This is known as genericide and has happened to brands such as aspirin, escalator, and zipper.

Question 10

Why are many companies concerned about brand management?

Accepted Answer

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

Question 11

Some factors that allow firms to make economic profits are beyond its control.All but one of the following is an uncontrollable factor.Which factor is controllable?

Accepted Answer

The answer of Some factors that allow firms to make...

Question 12

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 13

A firm cannot control all of the factors that allow it to make economic profits.Which of the following is an example of an uncontrollable factor?

Accepted Answer

Input prices are an external factor that the firm has no control over. The other choices, such as product differentiation and hiring competent managers, are factors that the firm can influence to some degree. Producing at a lower average total cost than competing firms can also be influenced by the firm's production decisions and efficiency measures.

Question 14

The ability to engage in product differentiation is one of the factors a manager or owner of a firm can control in order to create value for consumers.

Accepted Answer

Product differentiation allows a firm to create unique features or attributes for their product or service, which sets them apart from competitors and can create additional value for consumers. A manager or owner of a firm has control over how they differentiate their product or service, making it a factor they can control to provide value to consumers.

Question 15

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

Accepted Answer

Marketing involves all the activities such as research, analysis, promotion, and distribution that are essential for a firm to sell a product or service to a consumer.

Question 16

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

Accepted Answer

The two marketing tools that firms use to differentiate their products are brand management and advertising. Brand management involves creating and maintaining a strong brand image and identity, while advertising is the promotion of the brand and its products through various media channels. These tools help firms stand out from competitors and attract customers based on unique characteristics and features of their products. Lobbying and word of mouth, market research and demand estimation, and consumer surveys and market experiments are not directly related to product differentiation.

Question 17

The marketing of the first ballpoint by Milton Reynolds showed

Accepted Answer

The marketing of the first ballpoint by Milton Reynolds showed that being the first firm to market a product may not lead to a long-lived advantage over later entrants into the market. This is because Reynolds enjoyed a temporary monopoly because of patent protection, but competitors could enter the market once the patent expired, leading to increased competition and decreased market share for Reynolds.

Question 18

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 19

Which of the following statements is true?

Accepted Answer

The answer of Which of the following statements is true?
...

Question 20

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

Accepted Answer

When a firm advertises a product, it wants to create brand loyalty and differentiate its product from competitors, which in turn makes the demand curve for the product more inelastic. This means consumers are less likely to switch to a substitute product even if the price increases, resulting in higher profits for the firm.

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