The difference between economies of scale and economies of scope is:
a. economies of scale occur whenever inputs can be shared in the production of different products
b. economies of scope occur whenever inputs can be shared in the production of different products
c. economies of scale can occur when two or more products are produced
d. economies of scope can occur when two or more products are produced
e. both b and d
QUESTION 2Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the retailers to undertake costly activities, which they otherwise may not realize the full benefits of on their own
b. Serve as a signal of the manufacturer's belief of the likely success of his product
c. Reimburse the retailer for the cost of managing an extended inventory
d. All of the above
QUESTION 3After massive promotion of Justin Bieber's latest music album, the producers reacted by raising prices for his albums. This implies that promotion expenditures made the album demand
a. Elastic
b. Unitary elastic
c. Vertical
d. Inelastic
QUESTION 4In the linear breakeven model, a firm incurs operating losses whenever output is less than the breakeven level.
a. true b. false
QUESTION 5Vertical contracts between manufacturers and retailers often aim to
a. Serve as a signal of the manufacturer's belief of the likely success of his product
b. Reward the retailer for undertaking the risk inherent in introducing a new product
c. Reimburse the retailer for the cost of managing an extended inventory
d. All of the above
QUESTION 6The four P's are
a. Price, Product, Psychological, Promotion
b. Price, Placement, Psychological, Promotion
c. Price, Product, Placement, Promotion
d. Price, Product, Psychological, Placement
QUESTION 7In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by:
a. one minus the variable cost ratio
b. contribution margin per unit
c. selling price per unit
d. standard deviation of unit sales
e. none of the above
QUESTION 8Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the retailers to undertake costly activities, which they otherwise may not realize the full benefits of on their own
b. Reward the retailer for undertaking the risk inherent in introducing a new product
c. Reimburse the retailer for the cost of managing an extended inventory
d. All of the above
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