Question : 11) A large majority of the personal computers (PCs) in : 1387891

11) A large majority of the personal computers (PCs) in the United States use an operating system purchased from Microsoft. Microsoft’s relationship with PC manufacturers is an example of which of Porter’s competitive forces?

A) the threat from new entrants

B) the bargaining power of suppliers

C) the bargaining power of buyers

D) competition from substitute goods or services

12) The five competitive forces model was developed by

A) Michael Porter.

B) John Nash.

C) Michael Spence.

D) Porter Smith.

13) Which of the following is not one of the five competitive forces?

A) the threat from potential entrants

B) the bargaining power of buyers

C) the firm’s ability to differentiate its product

D) the bargaining power of suppliers

14) Assume that the four-firm concentration ratio in an industry is 85 percent. Which of the following statements uses one of the five competitive forces to argue that this industry may be more competitive than its concentration ratio suggests?

A) The high concentration may be due to patents owned by the largest firms but competition will increase when patent rights expire.

B) If high concentration is the result of large firms owning much of the available supply of a key input, the industry will become more competitive when new sources of the input are discovered by other firms.

C) Even though concentration is high, large firms in the industry may act competitively by spending large sums on advertising.

D) The threat of entry into this industry can cause firms in the industry to lower their prices and profits in order to deter entry.

15) Which of the following statements is generally true?

A) Rivalry is less the larger the number of firms in an industry.

B) The smaller the number of firms in an industry, the greater the rivalry.

C) The larger the number of firms in an industry, the greater the rivalry.

D) The degree of rivalry in an industry is largely independent of the number of firms.

16) A supplier of an input is unlikely to have bargaining power if

A) the input supplied is specialized.

B) many firms can supply the input.

C) it is the sole supplier of the input.

D) it has a patent on the input.

17) In 2013, the Educational Testing Service (ETS) charged $51 to take the Scholastic Aptitude Test (SAT) but $150 to take the Graduate Record Exam (GRE). One reason for this difference in price is

A) more people took the SAT than the GRE in 2013.

B) the GRE is a longer test with more questions.

C) an average, those who take the GRE have higher incomes than those who take the SAT.

D) the ETS faces competition in the market for the SAT but no competition for the GRE.

18) By the 21st century few people purchased printed encyclopedias. Which of the following competitive forces best explains this?

A) competition from substitutes

B) the bargaining power of buyers

C) the bargaining power of suppliers

D) the threat from potential entrants

19) For years economists believed that market structure explained the ability of some firms to earn economic profits. For example, firms in industries with little competition and high barriers to entry would earn higher profits than firms in competitive industries with low entry barriers. Which of the following has caused economists to question this explanation and seek other explanations for why firms are profitable?

A) Studies have shown that, on average, firms in competitive industries earn higher profit rates than firms in industries with little competition.

B) In recent years new technologies have increased the potential entry of new firms in industries with high entry barriers.

C) Studies have shown that firms in industries that have little competition and high entry barriers are not very profitable. Economists conclude from this that some competition is necessary in order to force firms to lower their costs and develop products that satisfy new consumer demands.

D) The market structure explanation fails to explain how firms in the same industry can have very different levels of profit.

20) In recent years online bookseller Amazon.com has lowered its profits by offering some of its customers free shipping and building more warehouses to hold its inventories. Which of the following explains Amazon.com’s actions?

A) Amazon.com feared government regulation if its profits were too high.

B) Amazon.com took these actions to deter entry into its market by new online booksellers.

C) Amazon.com took these actions to compete more effectively with existing online booksellers.

D) Amazon.com was forced to take these actions because of the bargaining power of its suppliers.