Quiz 2 in BLogic

These are companies that are not currently competing in the industry but have the capability to do so if they choose.

• Risk of entry

• Cost advantage

• Potential competitors

• None of the above

It arises when unit costs fall as a firm expands its output.

• Absolute advantage

• Economies of scale

• Switching costs

• None of the above

It arises when a customer invests time, energy, and money switching from the products offered by one established company to the products offered by a new entrant.

• Absolute advantage

• Economies of scale

• Switching costs

• None of the above

It refers to the number and size distribution of companies in an industry.

• Industry competitive structure

• Demand conditions

• Cost conditions

• Exit barriers

These are economic, strategic, and emotional factors that prevent companies from leaving an industry.

• Industry competitive structure

• Demand conditions

• Cost conditions

• Exit barriers

This industry is dominated by a small number of large companies or, in extreme cases, by just one company, and companies often are in a position to determine industry prices.

• Fragmented industry

• Consolidated industry

• Hospitality industry

• Manufacturing industry

This industry consists of a large number of small or medium-sized companies, none of which is in a position to determine industry price.

• Fragmented industry

• Consolidated industry

• Hospitality industry

• Manufacturing industry

Growing demand tends to reduce rivalry because all companies can sell more without taking market share away from other companies.

• False

• True

Demand declines when customers exit the marketplace.

• False

• True

An industry’s buyers may be the individual customers who consume its products (end-users) or the companies that distribute an industry’s products to end-users

• False

• True