Question 1

The conditions in which vertical relationships can enhance a firm's ability to price discriminate include

Accepted Answer

A)  the manufacturer's product is of value to multiple types of customers 
B)  the costs of arbitraging the price differences across markets is large 
C)  the manufacturer acquires the distributer in the higher priced market 
D)  competition provide little ability for the manufacturer has to price above marginal cost 
A)  the manufacturer's product is of value to multiple types of customers 
B)  the costs of arbitraging the price differences across markets is large 
C)  the manufacturer acquires the distributer in the higher priced market 
D)  competition provide little ability for the manufacturer has to price above marginal cost A

Question 2

The conditions for unaligned retailer and manufacturer incentives include

Accepted Answer

A)  customers are familiar with the product before they shop for it 
B)  retailers have can educate consumers at the point of sale 
C)  manufacturers are more efficient at education consumers 
D)  demand for the product is decreased with some consumer education 
A)  customers are familiar with the product before they shop for it 
B)  retailers have can educate consumers at the point of sale 
C)  manufacturers are more efficient at education consumers 
D)  demand for the product is decreased with some consumer education B

Question 3

When a supplier becomes more profitable

Accepted Answer

A)  there is increased benefits from acquiring it 
B)  the benefits from a stronger firm-to-firm relationship are increased 
C)  the benefits from a stronger firm-to-firm relationship are decreased 
D)  there is no additional reason to acquire it 
A)  there is increased benefits from acquiring it 
B)  the benefits from a stronger firm-to-firm relationship are increased 
C)  the benefits from a stronger firm-to-firm relationship are decreased 
D)  there is no additional reason to acquire it D

Question 4

if your supplier becomes more profitable

Accepted Answer

A)  you become more profitable by acquiring it 
B)  you become less profitable by acquiring it 
C)  acquiring it will make you more profitable if there are no synergies to exploit 
D)  unless there are no synergies to exploit through acquisition, acquiring it will not make you more profitable 
A)  you become more profitable by acquiring it 
B)  you become less profitable by acquiring it 
C)  acquiring it will make you more profitable if there are no synergies to exploit 
D)  unless there are no synergies to exploit through acquisition, acquiring it will not make you more profitable

Question 5

A characteristic of outsourcing is

Accepted Answer

A)  completely unrelated to vertical integration 
B)  likely to be profitable exactly when vertical integration is unprofitable 
C)  it prevents a firm from focusing on its core competencies 
D)  it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain 
A)  completely unrelated to vertical integration 
B)  likely to be profitable exactly when vertical integration is unprofitable 
C)  it prevents a firm from focusing on its core competencies 
D)  it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain

Question 6

Vertical relationships can increase profits through

Accepted Answer

A)  preventing firms from evading regulation 
B)  creating a double-markup problem 
C)  better aligning the incentives of manufacturers and retailers 
D)  preventing price discrimination 
A)  preventing firms from evading regulation 
B)  creating a double-markup problem 
C)  better aligning the incentives of manufacturers and retailers 
D)  preventing price discrimination

Question 7

The various ways that vertical relationships can evade regulation include

Accepted Answer

A)  tying the sale of an unregulated good to a customer's choice of a regulated good 
B)  unbundling regulated and unregulated goods 
C)  preventing the exclusion of rival unregulated goods 
D)  insuring tax rates are uniform across jurisdictions 
A)  tying the sale of an unregulated good to a customer's choice of a regulated good 
B)  unbundling regulated and unregulated goods 
C)  preventing the exclusion of rival unregulated goods 
D)  insuring tax rates are uniform across jurisdictions

Question 8

The conditions for unaligned retailer and manufacturer incentives include

Accepted Answer

A)  customers are familiar with the product before they shop for it 
B)  retailers have no opportunity to educate consumers 
C)  manufacturers have little scope for educating consumers 
D)  demand for the product is decreased with some consumer education 
A)  customers are familiar with the product before they shop for it 
B)  retailers have no opportunity to educate consumers 
C)  manufacturers have little scope for educating consumers 
D)  demand for the product is decreased with some consumer education

Question 9

The conditions in which vertical relationships can enhance a firm's ability to price discriminate include

Accepted Answer

A)  the manufacturer's product is of value to just one type of customer 
B)  the costs of arbitraging the price differences across markets is small 
C)  the manufacturer acquires the distributer in the higher priced market 
D)  competition provide little ability for the manufacturer has to price above marginal cost 
A)  the manufacturer's product is of value to just one type of customer 
B)  the costs of arbitraging the price differences across markets is small 
C)  the manufacturer acquires the distributer in the higher priced market 
D)  competition provide little ability for the manufacturer has to price above marginal cost

Question 10

Mechanisms that manufacturers can use to deal with misaligned retailer incentives include

Accepted Answer

A)  setting a minimum retail price 
B)  allowing many retailers to sell the product in each market 
C)  preventing retailers from compensating sales staff for demonstrating the product 
D)  eliminate manufacturer staff that was demonstrating the product in stores 
A)  setting a minimum retail price 
B)  allowing many retailers to sell the product in each market 
C)  preventing retailers from compensating sales staff for demonstrating the product 
D)  eliminate manufacturer staff that was demonstrating the product in stores

Question 11

A characteristic of outsourcing is

Accepted Answer

A)  completely unrelated to vertical integration 
B)  likely to be profitable exactly when vertical integration is profitable 
C)  it prevents a firm from focusing on its core competencies 
D)  can allow for the exploitation of differing degrees of economies of scale at different points in the supply chain 
A)  completely unrelated to vertical integration 
B)  likely to be profitable exactly when vertical integration is profitable 
C)  it prevents a firm from focusing on its core competencies 
D)  can allow for the exploitation of differing degrees of economies of scale at different points in the supply chain

Question 12

Acquiring a supplier because it becomes more profitable

Accepted Answer

A)  will raise the asking price to offset any increase in cash flow over time 
B)  will increase your profits 
C)  will decrease your profits 
D)  will make you alter operations 
A)  will raise the asking price to offset any increase in cash flow over time 
B)  will increase your profits 
C)  will decrease your profits 
D)  will make you alter operations

Question 13

The conditions in which vertical relationships can enhance a firm's ability to price discriminate include

Accepted Answer

A)  the manufacturer's product is of value to just one type of customer 
B)  the costs of arbitraging the price differences across markets is large 
C)  the manufacturer acquires the distributer in the lower priced market 
D)  competition provide little ability for the manufacturer has to price above marginal cost 
A)  the manufacturer's product is of value to just one type of customer 
B)  the costs of arbitraging the price differences across markets is large 
C)  the manufacturer acquires the distributer in the lower priced market 
D)  competition provide little ability for the manufacturer has to price above marginal cost

Question 14

A characteristic of outsourcing is

Accepted Answer

A)  essentially the opposite of vertical integration 
B)  likely to be profitable exactly when vertical integration is profitable 
C)  it prevents a firm from focusing on its core competencies 
D)  it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain 
A)  essentially the opposite of vertical integration 
B)  likely to be profitable exactly when vertical integration is profitable 
C)  it prevents a firm from focusing on its core competencies 
D)  it prevents the exploitation of differing degrees of economies of scale at different points in the supply chain

Question 15

Mechanisms that manufacturers can use to deal with misaligned retailer incentives include

Accepted Answer

A)  setting a maximum retail price 
B)  allowing many retailers to sell the product in each market 
C)  preventing retailers from compensating sales staff for demonstrating the product 
D)  providing manufacturer staff to demonstrate the product in stores 
A)  setting a maximum retail price 
B)  allowing many retailers to sell the product in each market 
C)  preventing retailers from compensating sales staff for demonstrating the product 
D)  providing manufacturer staff to demonstrate the product in stores

Question 16

The various ways that vertical relationships can evade regulation include

Accepted Answer

A)  tying the sale of a regulated good to a customer's choice of an unregulated good 
B)  unbundling regulated and unregulated goods 
C)  excluding sellers of competing unregulated goods 
D)  insuring tax rates are uniform across jurisdictions 
A)  tying the sale of a regulated good to a customer's choice of an unregulated good 
B)  unbundling regulated and unregulated goods 
C)  excluding sellers of competing unregulated goods 
D)  insuring tax rates are uniform across jurisdictions

Question 17

Double markup problems arise because

Accepted Answer

A)  upstream firms have no market power 
B)  downstream firms have no market power 
C)  upstream and downstream products are unrelated in demand 
D)  upstream and downstream firm's pricing decisions tend to decrease the demand for the other product 
A)  upstream firms have no market power 
B)  downstream firms have no market power 
C)  upstream and downstream products are unrelated in demand 
D)  upstream and downstream firm's pricing decisions tend to decrease the demand for the other product

Question 18

The conditions for unaligned retailer and manufacturer incentives include

Accepted Answer

A)  customers are unfamiliar with the product features before they shop for it 
B)  retailers have no opportunity to educate consumers 
C)  manufacturers are more efficient at education consumers 
D)  demand for the product is decreased with some consumer education 
A)  customers are unfamiliar with the product features before they shop for it 
B)  retailers have no opportunity to educate consumers 
C)  manufacturers are more efficient at education consumers 
D)  demand for the product is decreased with some consumer education

Question 19

The various ways that vertical relationships can evade regulation include

Accepted Answer

A)  tying the sale of a regulated good to a customer's choice of an unregulated good 
B)  bundling regulated and unregulated goods 
C)  preventing the exclusion of rival unregulated goods 
D)  insuring tax rates are uniform across jurisdictions 
A)  tying the sale of a regulated good to a customer's choice of an unregulated good 
B)  bundling regulated and unregulated goods 
C)  preventing the exclusion of rival unregulated goods 
D)  insuring tax rates are uniform across jurisdictions

Question 20

Double markup problems arise when

Accepted Answer

A)  upstream firms have no market power 
B)  downstream firms have market power 
C)  upstream and downstream products are unrelated in demand 
D)  upstream and downstream firm's pricing decisions tend to increase the demand for the other product 
A)  upstream firms have no market power 
B)  downstream firms have market power 
C)  upstream and downstream products are unrelated in demand 
D)  upstream and downstream firm's pricing decisions tend to increase the demand for the other product

Exam 23: Managing Vertical Relationships

The conditions in which vertical relationships can enhance a firm's ability to price discriminate include

The conditions for unaligned retailer and manufacturer incentives include

When a supplier becomes more profitable

if your supplier becomes more profitable

A characteristic of outsourcing is

Vertical relationships can increase profits through

The various ways that vertical relationships can evade regulation include

The conditions for unaligned retailer and manufacturer incentives include

The conditions in which vertical relationships can enhance a firm's ability to price discriminate include

Mechanisms that manufacturers can use to deal with misaligned retailer incentives include

A characteristic of outsourcing is

Acquiring a supplier because it becomes more profitable

The conditions in which vertical relationships can enhance a firm's ability to price discriminate include

A characteristic of outsourcing is

Mechanisms that manufacturers can use to deal with misaligned retailer incentives include

The various ways that vertical relationships can evade regulation include

Double markup problems arise because

The conditions for unaligned retailer and manufacturer incentives include

The various ways that vertical relationships can evade regulation include

Double markup problems arise when

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Muchdecisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Economies of Scale and Scope

Understanding Markets and Industry Changes

Market Structure and Long-Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination Indirect Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Filters