Question 1

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

Accepted Answer

Marketing includes all activities involved in promoting and selling a product, such as research, advertising, pricing, and distribution.

Question 2

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 3

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?
A)product differentiation
B)input prices
C)producing at a lower average total cost than competing firms
D)hiring competent managers

Accepted Answer

Input prices are an example of an uncontrollable factor, as the firm has no control over the prices of the inputs it purchases. The other choices listed are examples of factors that the firm may be able to control to some extent.

Question 4

Why are many companies concerned about brand management?

Accepted Answer

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

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

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 7

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 8

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...

Question 9

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.
-Refer to the Article Summary.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 mentioned in the article are differentiating themselves from competitors by offering pet-friendly policies and amenities, which appeals to pet owners. This is an example of product differentiation.

Question 10

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 11

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

Accepted Answer

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

Question 12

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 means such as improving operational efficiency, decreasing waste, and negotiating better deals with suppliers. Changing consumer tastes, a rise in the price of a key input, and the number of competitors in the market are external factors that the firm may have little control over.

Question 13

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 producing at a lower average cost than competitors are the two pillars of a firm's competitive strategy. This is known as Porter's generic strategies and is widely accepted in the field of strategic management as the foundation for achieving long-term profitability and success. While trademarks, lobbying, marketing, and employee selection do play a role in a firm's success, they are not as critical as having a strong competitive strategy based on differentiation or cost leadership.

Question 14

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

Although a trademark provides legal protection, there is still a risk that the name may become generic and widely used, making it difficult for the firm to maintain exclusive use of the name.

Question 15

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 16

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

When a firm advertises a product, it is usually trying to create brand loyalty and differentiate its product from competitors, which can make the demand curve more inelastic. This means that consumers will be less likely to switch to another product if the price increases, resulting in higher profits for the firm.

Question 17

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

This is true because negative consequences such as food poisoning outbreaks or health violations could damage the brand's reputation and lead to a loss of customers and profits. Therefore, brand name restaurants have a strong incentive to maintain high sanitary conditions to avoid any negative consequences.

Question 18

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 the product can reduce profits for the innovating firm and give competitors an opportunity to enter the market with a better product. This can ultimately harm the innovating firm's position in the market.

Question 19

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 20

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?
A)input prices
B)consumer tastes
C)chance events
D)product differentiation

Accepted Answer

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

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

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

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 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?

Why are many companies concerned about brand management?

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

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?

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.

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

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

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

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

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

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

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.

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?

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

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?