Question 1

Examples of possible barriers to entry include all of the following with the exception of:
A)bargaining power of buyers.
B)advertising expenditures.
C)capital requirements.
D)switching costs.

Accepted Answer

Bargaining power of buyers is not a barrier to entry; it is a factor that influences the power dynamics between buyers and sellers in an industry. Barriers to entry, such as advertising expenditures, capital requirements, and switching costs, are obstacles that make it difficult for new competitors to enter an industry.

Question 2

Tiger Direct is an online company that exists only in the online world. Because Tiger Direct does not have bricks and mortar, it can be referred to as a:
A)consumer to business entity
B)self-sufficient player
C)pure-play competitor
D)consumer generated content provider

Accepted Answer

A pure-play competitor is a company that exists solely in the online world and does not have any physical stores or locations. Tiger Direct fits this description as it operates as an online retailer without any brick-and-mortar stores.

Question 3

Although The Beerstore and The LCBO sell the majority of alcohol in Ontario, the Microbrewery Association of Ontario (MAO)regulates all of the microbreweries to ensure fair play. The microbrewery industry is one that has:
A)self-policing.
B)self-monitoring.
C)industry regulation.
D)self-regulation.

Accepted Answer

The statement "The Microbrewery Association of Ontario (MAO)regulates all of the microbreweries to ensure fair play" implies that the microbrewery industry engages in self-regulation. Therefore, option D, self-regulation, is the correct answer.

Question 4

A new brewery that wants to market beer nationally must deal with the fact that Anheuser-Busch spends over $225 million a year on marketing. This statement is an example of_________ for the new national brewery.
A)a barrier to entry
B)social responsibility
C)the power of buyers
D)the power of suppliers

Accepted Answer

The statement about Anheuser-Busch's marketing budget highlights a significant barrier to entry for the new brewery, as it will be difficult to compete with such a large marketing budget in the national market.

Question 5

Although in Canada reasonable efforts are made to provide a "level playing field" in business, it would be difficult for a new Canadian automobile company to be established today, primarily because of:
A)lower standards of living.
B)barriers to entry.
C)government regulations of competitive practices.
D)corporate prejudices.

Accepted Answer

The primary reason why a new Canadian automobile company would have difficulty being established today is due to barriers to entry, such as the high costs associated with setting up manufacturing facilities, developing supply chains, and establishing a brand name in a highly competitive industry. While government regulations and corporate prejudices may also present challenges, they are not the primary reason why it would be difficult for a new automobile company to enter the market. Lower standards of living may indirectly contribute to the challenges faced by a new company, but they are not a direct barrier to entry.

Question 6

John's Auto Body shop has fewer than 5 employees; the local community business census specifically refers to his firm as a:
A)medium-sized enterprise
B)small enterprise
C)micro-enterprise
D)virtual enterprise

Accepted Answer

A micro-enterprise is defined as a business with fewer than 10 employees, making it the most appropriate classification for John's Auto Body shop with fewer than 5 employees.

Question 7

Canada is sometimes referred to by some economists as the "land of_________ " because it has several major industries that can be considered __________ airline industry and the banking industry.
A)oligopoly, oligopolistic
B)monopoly, monopolistic
C)pure competition, purely competitive
D)monopolistic competition, monopolistically competitive

Accepted Answer

Canada is often referred to as the "land of oligopoly" because many of its major industries, including the airline and banking sectors, are dominated by a few large firms, making them oligopolistic in nature.

Question 8

Forrester Research estimates marketers in 1999 lost about $3 billion in potential sales because consumers were worried about privacy. Although there are several laws being considered that would protect consumers' rights to privacy, none have yet made been made into a law. This is one way _________forces have not helped the growth of electronic commerce.
A)social
B)economic
C)competitive
D)regulatory

Accepted Answer

The lack of regulatory forces protecting consumers' privacy has hindered the growth of electronic commerce by causing consumers to be hesitant to engage in e-commerce transactions.

Question 9

In 1998, F. Hoffman-LaRoche Ltd. and BASF AG, two international pharmaceutical companies, were ordered to pay $725 million in fines for plotting to raise and fix prices of vitamins used in virtually every home in the U.S. This is an example of how
________ forces affect the marketing environment.
A)ecological
B)regulatory
C)social
D)technologic al

Accepted Answer

The fact that F. Hoffman-LaRoche Ltd. and BASF AG were ordered to pay a fine for price fixing indicates that there were regulatory forces affecting the marketing environment.

Question 10

Barriers to entry are business practices or conditions that make it difficult for new firms to enter the market. Which of the following is not an example of a barrier to entry?
A)advertising expenditures
B)a company's manufacturing cycle
C)distribution access
D)capital requirements

Accepted Answer

A company's manufacturing cycle is not typically considered a barrier to entry. Barriers to entry often involve factors that require significant resources or connections that a new company might not have, such as high capital requirements, extensive advertising to establish brand recognition, or securing distribution channels. A manufacturing cycle, which refers to the time it takes to manufacture a product, is more of an operational process internal to a company rather than an external barrier that would prevent new companies from entering the market.

Question 11

Which of the following offences is not a criminal offence under the Competition Act in Canada?
A)bid rigging.
B)price skimming.
C)bait-and-switch selling.
D)predatory pricing.

Accepted Answer

Price skimming, although potentially unethical, is not considered a criminal offence under the Competition Act in Canada. The other options listed (bid rigging, bait-and-switch selling, and predatory pricing) are all considered criminal offences under the Act.

Question 12

John wants to buy WWE SmackDown vs. Raw, a new video game marketed for the Xbox 360, a Microsoft and WWE joint venture. The game costs $65 and will only play on an Xbox 360 game console, which will cost him about $450. If he commits to buying the Xbox, it is unlikely he will buy anything but Xbox games due to:
A)switching costs.
B)product differentiation.
C)access to distributors.
D)capital requirements.

Accepted Answer

Switching costs refer to the costs incurred by a consumer when switching from one product to another. In this case, if John commits to buying the Xbox 360, he will incur a significant switching cost if he decides to switch to a different gaming console in the future. This is because he will have to buy all new games and accessories for the new console, which can be expensive. Therefore, the best choice would be A, switching costs.

Question 13

When the Canadian Government implements new laws about Temporary Foreign Workers on businesses, they are essentially implementing new:
A)Regulations
B)Jurisprudence
C)Competitive restraints
D)Legal formalizations

Accepted Answer

Regulations are rules or directives issued by a government authority to carry out or enforce a law. In this case, the Canadian Government is putting in place new rules for businesses to follow regarding their use of Temporary Foreign Workers. Therefore, the best choice is A) Regulations.

Question 14

A new ad from Toys'R'us is directed to children using common Disney characters. This ad would be allowed in all provinces except:
A)Ontario.
B)Alberta.
C)British Columbia.
D)Quebec.

Accepted Answer

In Quebec, advertising directed towards children is heavily regulated and restricted under the Consumer Protection Act, which prohibits the use of commercial advertising directed to children under the age of 13. This means that the ad from Toys'R'us with common Disney characters directed toward children would not be allowed in Quebec.

Question 15

A supplier gains power when the product is:
A)critical to the buyer, and switching costs are high.
B)relatively unimportant to the seller, and switching costs are low.
C)critical to the buyer, and switching costs are low.
D)relatively unimportant to the seller, and switching costs are high.

Accepted Answer

A supplier gains power when the product is critical to the buyer, and switching costs are high. This is because the buyer is more dependent on the supplier and cannot easily switch to another supplier without incurring significant costs. This gives the supplier more bargaining power and allows them to set higher prices or dictate other terms of the relationship.

Question 16

The Canadian Government enacted Bill C-28 to fight against Internet and wireless spam. The legislation protects consumers':
A)social media accounts.
B)privacy.
C)e-mail.
D)rights.

Accepted Answer

Bill C-28, also known as Canada's Anti-Spam Legislation (CASL), primarily focuses on protecting consumers' privacy by regulating the sending of commercial electronic messages and the installation of software programs without consent.

Question 17

Becoming a new provider of hydroelectric power in Quebec is likely difficult and so existing providers do not worry much about new competition. Therefore, the ________ Is/are likely high in this marketplace.
A)business practices or conditions that make it difficult for new firms to enter a market
B)a set of security devices used primarily in automobiles
C)"smart" security devices designed for office buildings
D)a set of rules and procedures that firms in an industry present to new firms in the industry

Accepted Answer

The term in question describes barriers to entry, which are factors that make it difficult for new firms to enter a market. The fact that existing providers in Quebec do not worry about new competition suggests that the barriers to entry are high in this market.

Question 18

When a new mobile phone operator wants to establish themselves in Canada, they must consider all of the following components or forces that drives competition except:
A)monopolistic power
B)ease of entry
C)the possibility of product substitution
D)the bargaining power of buyers and suppliers

Accepted Answer

Monopolistic power is not a force that drives competition; rather, it is a barrier to competition. The other choices are all factors that new mobile phone operators must consider when trying to establish themselves in the Canadian market.

Question 19

The power of buyers will increase when:
A)the number of buyers is high.
B)there are high switching costs.
C)the product represents a small share of the buyer's total cost.
D)the number of buyers is low.

Accepted Answer

When the number of buyers is low, each buyer has more influence and negotiating power over the supplier.

Question 20

In considering its competition, a firm must assess the likelihood of new entrants. Additional producers in the marketplace typically:
A)reduce industry capacity and raise prices.
B)increase industry capacity and raise prices.
C)increase industry capacity and lower prices.
D)reduce industry capacity and lower prices.

Accepted Answer

The entry of new producers in a market leads to an increase in industry capacity, which can lead to lower prices due to increased competition. This is because new firms entering a market will typically attempt to gain market share by offering lower prices or differentiated products, forcing existing firms to lower their prices in response. Thus, the correct answer is choice C: new entrants typically increase industry capacity and lower prices.

Quiz 3: Scanning the Marketing Environment

Examples of possible barriers to entry include all of the following with the exception of:

Tiger Direct is an online company that exists only in the online world. Because Tiger Direct does not have bricks and mortar, it can be referred to as a:

Although The Beerstore and The LCBO sell the majority of alcohol in Ontario, the Microbrewery Association of Ontario (MAO) regulates all of the microbreweries to ensure fair play. The microbrewery industry is one that has:

A new brewery that wants to market beer nationally must deal with the fact that Anheuser-Busch spends over $225 million a year on marketing. This statement is an example of_________ for the new national brewery.

Although in Canada reasonable efforts are made to provide a "level playing field" in business, it would be difficult for a new Canadian automobile company to be established today, primarily because of:

John's Auto Body shop has fewer than 5 employees; the local community business census specifically refers to his firm as a:

Canada is sometimes referred to by some economists as the "land of_ " because it has several major industries that can be considered __ airline industry and the banking industry.

In 1998, F. Hoffman-LaRoche Ltd. and BASF AG, two international pharmaceutical companies, were ordered to pay $725 million in fines for plotting to raise and fix prices of vitamins used in virtually every home in the U.S. This is an example of how ________ forces affect the marketing environment.

Barriers to entry are business practices or conditions that make it difficult for new firms to enter the market. Which of the following is not an example of a barrier to entry?

Which of the following offences is not a criminal offence under the Competition Act in Canada?

When the Canadian Government implements new laws about Temporary Foreign Workers on businesses, they are essentially implementing new:

A new ad from Toys'R'us is directed to children using common Disney characters. This ad would be allowed in all provinces except:

A supplier gains power when the product is:

The Canadian Government enacted Bill C-28 to fight against Internet and wireless spam. The legislation protects consumers':

Becoming a new provider of hydroelectric power in Quebec is likely difficult and so existing providers do not worry much about new competition. Therefore, the ________ Is/are likely high in this marketplace.

When a new mobile phone operator wants to establish themselves in Canada, they must consider all of the following components or forces that drives competition except:

The power of buyers will increase when:

In considering its competition, a firm must assess the likelihood of new entrants. Additional producers in the marketplace typically: