Chapter 5 Final Review

Businesses stress quality of products, services, and financing when engaging in non-price competition.

• True

• False

Competition forces businesses to produce poor-quality products at low prices.

• True

• False

When the supply of a product exceeds the demand for it, businesses usually lower the product’s price.

• True

• False

Due to deregulation of the utility companies, the United States government does not restrict the prices charged by gas and electric companies.

• True

• False

Businesses in the private sector produce the same product or group of products.

• True

• False

Sales and rebates are examples of what strategy?

• Price Competition

• Low Fares

• Competitive Edge

• Roll Backs

What is the purpose of a licensing agreement?

• allows doctors to treat patients

• protects corporations from fraud

• protects an originator from unauthorized copying of name and products

• allows businesses to operate in areas previously zoned as residential

What occurs when the potential for earning increases?

• competition increases

• risk increases

• taxes decrease

• the marketing expenditure decreases

What is the purpose of most businesses?

• to produce products

• to serve board of directors

• to compete

• to provide government services

What is the term for the struggle between companies for customers?

• profit

• promotion

• competition

• surplus