Question 1

Bribes, payoffs, and extortion are common and accepted ways of everyday life in some countries.

Accepted Answer

In some countries, bribery, payoffs, and extortion are unfortunately a part of everyday life and are sometimes even considered normal or expected behavior.

Question 2

If every participating firm has the same marginal benefit from industrywide advertising, then ________.

Accepted Answer

Since every participating firm has the same marginal benefit from industrywide advertising, requiring every firm to pay the same amount for the advertising is fair and not likely to create dissatisfaction among the firms. If every firm benefits equally from the advertising, they should all contribute equally to its cost.

Question 3

In industrywide advertising, managers have an incentive to ________and________ for the advertising.

Accepted Answer

In industrywide advertising, managers have an incentive to free-ride, meaning they benefit from the advertising without contributing to its cost, hence "not pay" is the correct completion.

Question 4

Suppose you are the manager of a plastic recycle industry. In the industry, there are 5 large recycling firms and 20 small firms. You are aware that the large firms have a marginal benefit curve from industrywide advertising that lies above the small firms' marginal benefit curve. Which of the following payment plans is least likely to create discord across the participating firms?

Accepted Answer

Option D is least likely to create discord because it aligns with the principle that those who benefit more (large firms with a higher marginal benefit curve) should pay more, which seems fair to both large and small firms.

Question 5

For resale price maintenance to be successful for the manufacturer, as a result of the product- specific services, the shift in the market demand must________the shift in the market supply.

Accepted Answer

For resale price maintenance to be successful for the manufacturer, the shift in market demand must be greater than the shift in market supply. This is because the increased demand, driven by product-specific services, needs to outweigh any increase in supply to maintain higher price levels and ensure profitability.

Question 6

A German company whose stock is publically traded in the United States is not subject to the Foreign Corrupt Practices Act.

Accepted Answer

The Foreign Corrupt Practices Act applies to any company, foreign or domestic, whose securities are publicly traded in the United States. Therefore, a German company whose stock is publicly traded in the US is subject to the FCPA.

Question 7

If consumers value the product- specific services for a new smartphone at $25, if retailers offer the product- specific services for the smartphone, the market ________will ________.

Accepted Answer

When consumers value product-specific services for a new smartphone at $25, it means they are willing to pay an additional $25 for the smartphone because of these services. This increases the demand for the smartphone at every price level, leading to a parallel shift to the right in the demand curve by $25.

Question 8

In joint venture, it is not possible for one firm to purchase the other partner's share at any point.

Accepted Answer

In a joint venture, one firm may have the option to purchase the other partner's share at some point as agreed upon in the joint venture agreement. However, this option is not always available and depends on the specific terms of the joint venture agreement.

Question 9

Because industrywide advertising is a _________ good, optimal industrywide advertising is ________to achieve.

Accepted Answer

Industrywide advertising is a public good, which means that it is non-rivalrous and non-excludable, and its benefits are enjoyed by all firms in the industry. This makes it difficult to achieve optimal industrywide advertising because individual firms have an incentive to free ride and not contribute their fair share, leading to underinvestment in advertising. Therefore, it is difficult to coordinate and ensure that all firms in the industry contribute their fair share to achieve optimal industrywide advertising.

Question 10

As a manager of an industrywide trade organization, your decisions regarding industrywide advertising are________ if the participating firms' marginal benefits are similar as there will be ________disagreement among the firms regarding the amount of the industrywide advertising.

Accepted Answer

If the participating firms' marginal benefits are similar, it would be easier to make decisions regarding industrywide advertising as there would be less disagreement among the firms regarding the amount of industrywide advertising. Therefore, option C is the correct answer.

Question 11

Master franchising allows firms to maintain control over local operations.

Accepted Answer

Master franchising grants the franchisor the power to maintain control over local operations within the franchise territory.

Question 12

If retailers' marginal cost from providing product- specific services for a new smart television is $50, if retailers offer the product- specific services for the television, the market ________will________

Accepted Answer

The marginal cost of providing product-specific services for the new smart television is $50. If the retailers offer the product-specific services, their costs will increase by $50 for every unit of the television they sell. This will result in a decrease in the quantity supplied at every given price level, thereby shifting the supply curve to the left. Hence, the correct answer is A.

Question 13

Managers of franchises ________face the problem of free- riding with their system- wide advertising because franchises________ contractually bound to pay for the advertising.

Accepted Answer

The answer of Managers of franchises ________face the problem of...

Question 14

For a________ , increasing the equilibrium________ in the retail market is the key to successful use of resale price maintenance.

Accepted Answer

A manufacturer can use resale price maintenance to increase the equilibrium price in the retail market. This will lead to higher profits for the manufacturer.

Question 15

Consumers value the product- specific services for a new smartphone at $25 and the marginal cost to the retailers for providing the product- specific services is $20. If the retailers provide the product- specific services, which of the following is true?

Accepted Answer

The value consumers place on the product-specific services is greater than the cost to the retailers of providing those services, indicating that there will be an increase in demand for the product if the services are provided. However, since the marginal cost of providing the services is less than the value consumers place on the services, retailers will choose to provide the services, creating a shift in the market supply. Since the increase in demand is less than the increase in supply, the shift in the market demand will exceed the shift in the market supply.

Question 16

Suppose you are the manager of a large cardboard box industry. In the industry, there are 10 very large firms and 15 small firms. You are aware that the very large firms have a greater marginal benefit from industrywide advertising compared to the small firms. Which of the following payment plans is least likely to create discord across the participating firms?

Accepted Answer

Option C is the most equitable and least likely to create discord because it acknowledges the different benefits and capacities between large and small firms by grouping them accordingly and charging fees proportional to their expected benefits and ability to pay.

Question 17

If retailers' marginal cost from providing product- specific services for a new smart television is $50, if retailers offer the product- specific services for the television, the market________will________

Accepted Answer

The marginal cost of providing product-specific services is a cost for the retailers, and it will affect their willingness to supply the smart television. If the retailers decide to offer the services, they will have to increase the price of the television by at least $50 to cover the cost, which means the supply curve will shift parallel to the left because at any given price, the quantity supplied will be lower by $50. Therefore, the correct choice is A.

Question 18

If consumers value the product- specific services for a new smartphone at $25, if retailers offer the product- specific services for the smartphone, the market ________will ________.

Accepted Answer

The question mentions that consumers value the product-specific services at $25, which means that the demand curve for the smartphone will shift to the right if retailers offer these services. This is because consumers will be willing to pay more for the smartphone if it comes bundled with the product-specific services. Hence, the correct answer is option D, i.e., demand will shift to the right.

Question 19

All methods of entry into a foreign market require managers to conduct due diligence.

Accepted Answer

Due diligence is necessary in order to understand the regulatory environment, local culture and customs, and potential risks involved in entering a foreign market. It allows managers to make informed decisions and develop a successful market entry strategy based on accurate information.

Question 20

In reference to industrywide advertising, managers of non- agricultural and non- franchised industry associations face which of the following problems?

Accepted Answer

In industrywide advertising, firms can both free-ride (benefit from the advertising without contributing to its cost) and protest the amount they are asked to pay, as there is no compulsory mechanism to enforce payment or silence dissent.

Quiz 13: Marketing Decisions: Advertising and Promotion

Bribes, payoffs, and extortion are common and accepted ways of everyday life in some countries.

If every participating firm has the same marginal benefit from industrywide advertising, then ________.

In industrywide advertising, managers have an incentive to and for the advertising.

For resale price maintenance to be successful for the manufacturer, as a result of the product- specific services, the shift in the market demand must________the shift in the market supply.

A German company whose stock is publically traded in the United States is not subject to the Foreign Corrupt Practices Act.

If consumers value the product- specific services for a new smartphone at $25, if retailers offer the product- specific services for the smartphone, the market will .

In joint venture, it is not possible for one firm to purchase the other partner's share at any point.

Because industrywide advertising is a _ good, optimal industrywide advertising is to achieve.

As a manager of an industrywide trade organization, your decisions regarding industrywide advertising are if the participating firms' marginal benefits are similar as there will be disagreement among the firms regarding the amount of the industrywide advertising.

Master franchising allows firms to maintain control over local operations.

If retailers' marginal cost from providing product- specific services for a new smart television is $50, if retailers offer the product- specific services for the television, the market will

Managers of franchises face the problem of free- riding with their system- wide advertising because franchises contractually bound to pay for the advertising.

For a , increasing the equilibrium in the retail market is the key to successful use of resale price maintenance.

Consumers value the product- specific services for a new smartphone at $25 and the marginal cost to the retailers for providing the product- specific services is $20. If the retailers provide the product- specific services, which of the following is true?

If retailers' marginal cost from providing product- specific services for a new smart television is $50, if retailers offer the product- specific services for the television, the marketwill

If consumers value the product- specific services for a new smartphone at $25, if retailers offer the product- specific services for the smartphone, the market will .

All methods of entry into a foreign market require managers to conduct due diligence.

In reference to industrywide advertising, managers of non- agricultural and non- franchised industry associations face which of the following problems?