QUESTION A critical competitive feature of an oligopoly is the: A. lack of interaction among the major players. B. presence of a domestic market which is open for foreign firms. C. desire of all the major players to avoid the phenomenon of diminishing returns. D. interdependence of the major players. E. lack of imitative behavior […]
QUESTION If one firm in an oligopoly cuts prices, then most likely, its competitors will: A. make profits. B. also respond with similar price cuts. C. correspondingly raise prices. D. capture additional market share. E. not be impacted by the price cuts. ANSWER B
QUESTION QFresh, a brand for energy drinks, launched a healthy lime-based drink without preservatives. Immediately after this another brand, Fast Fizz, which manufactures energy drinks, also announced the launch of a new refreshing drink without preservatives. Then Ignite, a third brand of energy drinks, reduced the price of its apple-based drink. Which of the following […]
QUESTION Which of the following arises when two or more enterprises encounter each other in different regional markets, national markets, or industries? A. Monopoly B. Monopsony C. Cartel D. Multipoint competition E. Oligopsony ANSWER D
QUESTION Which of the following concepts helps explain how location factors affect the direction of FDI? A. The eclectic paradigm B. The protectionism argument C. The product life-cycle theory D. The new trade theory E. The infant industry argument ANSWER A
QUESTION The difference between Internalization theory and imitative theory is that: A. internalization theory does not explain why the first firm in an oligopoly decides to undertake FDI rather than to export or license. B. imitative theory addresses the issue of whether FDI is more efficient than exporting or licensing for expanding abroad. C. most […]
QUESTION Location-specific advantages for a firm are those that arise from: A. acquiring the home markets of foreign firms that threaten a firm’s domestic market. B. gaining a commanding position in one market and using them to subsidize competitive attacks in other markets. C. preferring exporting over licensing in order to retain control over know-how, […]
QUESTION The idea behind multipoint competition is to ensure that: A. a rival does not dominate one market and use the profits from there to drive competitive attacks elsewhere. B. the competitors cooperate with each other to establish a cartel. C. no other competitors can enter the market unless they resort to licensing or franchising […]
QUESTION Silicon Valley in California is the world center for the computer and semiconductor industry and has many of the world’s major computer and semiconductor companies located close to each other, thus offering the location-specific advantage of: A. a multipoint competition. B. an oligopoly. C. a first mover. D. externalities. E. free riders. ANSWER […]
QUESTION Dunning’s theory helps explain: A. how firms try to match each other’s moves in different markets to try to hold each other in check. B. the interdependence between firms in an oligopoly that leads to imitative behavior among the rivals. C. why a greenfield investment in a new facility is better than an acquisition […]
