Quiz on Firm Growth and Market Power

Why do firms grow?

• To make more money, to gain monopoly power, and for greater security

• To reduce their workforce

• To increase their debt

• To avoid paying taxes

What is one reason some firms remain small?

• There are constraints on growth

• There is an increased number of employees

• There is an increased number of products

• There are increased costs of production

Who controls the day-to-day decision making in many large firms?

• Chief executive and senior managers

• Shareholders

• Customers

• Suppliers

What is one effect of the separation of ownership and control in large firms?

• Differing aims of the two stakeholders

• Increased number of employees

• Increased number of products

• Increased costs of production

What does the public sector refer to in the UK economy?

• The part of the economy owned and controlled by local or central government.

• The part of the economy owned and run by individuals.

• The part of the economy that is involved in profit-making.

• The part of the economy that does not provide public services.

What is the aim of not-for-profit private sector organisations?

• Maximising social welfare.

• Maximising profits.

• Competing with for-profit organisations.

• Avoiding taxes.

What is the difference between the private and public sectors in terms of ownership?

• The private sector is owned by individuals or groups, while the public sector is owned by the government.

• The private sector is owned by the government, while the public sector is owned by individuals.

• Both sectors are owned by the government.

• Both sectors are owned by individuals.

What is vertical integration?

• Integration of firms in different industries

• Integration of firms in the same industry but at different stages in the production process

• Integration of firms in the same industry at the same stage in the production process

• Integration of firms in different countries

What is backward integration?

• When a firm moves towards the eventual consumer of a good

• When a firm takes over another firm in a different industry

• When a firm takes over a supplier of a good

• When a firm reduces its output

What is forward integration?

• When a firm moves towards the eventual consumer of a good

• When a firm takes over a supplier of a good

• When a firm reduces its output

• When a firm merges with another firm in a different industry