Chapter 11 Flashcards
Which of the following market structures are NOT included in the term imperfect competition?
Monopoly
Perfect competition
What is the market structure where producers are identifiable and they have some control over price?
Imperfect competition
Which of the following are ways a firm might try to differentiate its product?
a distinctive logo
advertising
Which of the following is an example of a brand logo which helps a company differentiate itself from others?
Nike’s swoosh
McDonald’s golden arches
In monopolistic competitive industries, small stores can sometimes compete with larger stores by _____.
having very convenient locations for customers.
What are the two kinds of imperfect competition?
Oligopoly
Monopolistic competition
What kind of market structure exists between perfect competition and monopoly?
Imperfect competition
Product development helps companies differentiate their products.
True
Product differentiation is when the goods sold by the firms in an industry _____.
are seen to have different qualities.
Which of the following are possible ways that firms can communicate to customers that their products are better than others?
Billboards
Television commercials
Hand delivered flyers
True or false: The Nike “swoosh” is an example of a brand logo which helps the company to differentiate itself from others.
True
For a business to secure a convenient store location even if it means higher prices and less selection is a form of ____.
product differentiation
Critics of advertising suggest that if all advertising was eliminated, _____.
people would continue to purchase goods anyway and consumer spending would not be affected
Which of the following market structures are NOT included in the term imperfect competition?
Monopoly
Perfect competition
Critics of advertising see it as being a barrier to entry and that it encourages oligopolies to have _____ tendencies.
Monopoly
Which of the following is NOT an example of a product that differs in its physical attributes?
Storage devices with different prices.
In what way can customers be convinced that a company’s product is better than that of others?
Advertising
Under what circumstance might advertising lead to a reduction in the average cost of production?
If it leads to increased competition and greater customer awareness of prices.
If it expands production such that there are economies of scale
Which of the following are arguments that critics offer to suggest that advertising is wasteful?
Advertising is mostly aimed at persuasion and the benefits from one company’s ads are cancelled out by another company’s ads.
People would continue to purchase goods anyway and consumer spending would not be affected.
Which of the following are ways firms attempt to differentiate their products?
Developing an effective advertising strategy.
Developing a recognizable brand logo.
Engaging in product redevelopment.
Critics see advertising as a potential _____.
barrier to entry
Product ______ is a distinctive characteristic of ______ competition.
differentiation; monopolistic
Product development helps companies differentiate their products.
True
Which of the following is not a characteristic of oligopoly?
Firms have no control over their price.