Podcast
Questions and Answers
A company substantially lowers its prices below cost to eliminate competition. Which concept does this exemplify?
A company substantially lowers its prices below cost to eliminate competition. Which concept does this exemplify?
- Predatory pricing (correct)
- Cost advantages independent of scale
- Restrictive practices
- Economy of scale
Which of the following best describes why established brands with high customer loyalty might face challenges when a disruptive innovation enters the market?
Which of the following best describes why established brands with high customer loyalty might face challenges when a disruptive innovation enters the market?
- Established brands are typically slower to adapt to new technologies. (correct)
- Customer loyalty makes customers less sensitive to price changes.
- Customer loyalty diminishes the effectiveness of advertising strategies.
- High customer loyalty ensures continued sales regardless of new entrants.
A pharmaceutical company discovers a new drug formula. What type of protection would best prevent competitors from producing the same drug?
A pharmaceutical company discovers a new drug formula. What type of protection would best prevent competitors from producing the same drug?
- Government regulation
- Intellectual property (correct)
- Distributor agreement
- Supplier agreement
A software company allows users to freely distribute its basic version with the intent that widespread adoption will increase demand for its premium features. What is this leveraging?
A software company allows users to freely distribute its basic version with the intent that widespread adoption will increase demand for its premium features. What is this leveraging?
A company invests heavily in new machinery to improve production efficiency but later finds that this machinery cannot be resold and has no alternative use. This situation exemplifies?
A company invests heavily in new machinery to improve production efficiency but later finds that this machinery cannot be resold and has no alternative use. This situation exemplifies?
A country imposes a 20% tax on all imported steel. What is this an example of?
A country imposes a 20% tax on all imported steel. What is this an example of?
Which of these strategies describes a business owning both the manufacturing and distribution of its products?
Which of these strategies describes a business owning both the manufacturing and distribution of its products?
A city council establishes specific zones where particular types of businesses can operate (e.g., industrial, residential, commercial). What is this an example of?
A city council establishes specific zones where particular types of businesses can operate (e.g., industrial, residential, commercial). What is this an example of?
A small business owner notices that, even after increasing the price of his product by 10%, the demand remains relatively constant. This scenario indicates?
A small business owner notices that, even after increasing the price of his product by 10%, the demand remains relatively constant. This scenario indicates?
What is the primary purpose of 'research and development' in a business context?
What is the primary purpose of 'research and development' in a business context?
Flashcards
Advertising
Advertising
Promoting a product or service to attract customers.
Capital
Capital
Money or assets used to start and run a business.
Control of resources
Control of resources
Having power or ownership of important materials needed for production.
Customer loyalty
Customer loyalty
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Distributor agreements
Distributor agreements
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Economy of scale
Economy of scale
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Intellectual property
Intellectual property
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Investment
Investment
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Network effect
Network effect
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Vertical integration
Vertical integration
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Study Notes
- Advertising involves promoting a product or service to attract customers.
- Capital refers to the money or assets used to start and run a business.
- Control of resources means having the power or ownership of important materials needed for production.
- Cost advantages independent of scale involve reducing costs in a business without increasing its size.
- Customer loyalty occurs when customers keep buying from a business because they trust or like it.
- Distributor agreements are contracts between companies and distributors outlining how products will be sold.
- Economy of scale refers to the cost advantage businesses get when producing goods in large quantities.
- Government regulations are laws set by the government that businesses must follow.
- Inelastic demand means that demand for a product doesn't change much, even if the price goes up or down.
- Intellectual property includes creations of the mind, like inventions, designs, or brands, that are legally protected.
- Investment involves putting money into something with the expectation of making a profit later.
- Network effect occurs when the value of a product or service increases as more people use it.
- Predatory pricing is selling products at a very low price to drive competitors out of the market.
- Restrictive practices are business actions that limit competition, often to maintain high prices.
- Research and development involves creating new products or improving existing ones.
- Supplier agreements are contracts between businesses and suppliers defining how goods will be provided.
- Sunk costs refer to money that has already been spent and cannot be recovered.
- Switching barriers are obstacles that make it hard for customers to switch to a competitor.
- Tariffs are taxes on imported goods, making them more expensive.
- Vertical integration: A business strategy where a company controls its supply chain by owning both production and distribution.
- Zoning laws divide land into different areas for specific types of use, like residential or commercial.
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