Chapter 8 Market Entry, Monopolistic Competition, and Oligopoly

| February 14, 2018

4)
For a company to convince consumers to use their products repeatedly, they must
A)
make the customers see the benefits of the product.
B)
hire another celebrity endorser.
C)
hire an independent company to evaluate the product.
D)
run the celebrity ads repeatedly.

5)
If a firm that makes $100 profit per pair of shoes pays LeBron James $2,000,000
to endorse their basketball shoes, then to make the endorsement pay off they
must sell at least
A)
$2,000,000 more in shoes.
B)
$20,000 more in shoes.
C)
20,000 more pairs of shoes.
D)
200,000 more pairs of shoes.

6)
If a firm that makes $5 profit per box of cigars pays Rush Limbaugh $1,000,000
to endorse their cigars, then to make the endorsement pay off they must sell at
least
A)
$2,000,000 more in cigars.
B)
$20,000 more in cigars.
C)
20,000 more boxes of cigars.
D)
200,000 more boxes of cigars.

Recall
the Application about South African consumer lender that offered different
interest rates in loan offers via mass mailings answer the following question(s).

7)
Recall the application. The number of consumers who accepted a particular loan
offer from the mass mailings
A)
was lower for offer letters with low interest rates.
B)
was higher for offer letters with high interest rates.
C)
was lower for offer letters with high interest rates.
D)
did not vary with the different interest rates.

8)
Recall the application. The number of men who accepted a particular loan offer
from the mass mailings ________ when the offer letter included the picture of a
________.
A)
increased; man rather than the picture of a woman
B)
increased; woman rather than the picture of a man
C)
decreased; either a man or a woman
D)
was unaffected; either a man or a woman

9)
Recall the application. The number of women who accepted a particular loan
offer from the mass mailings ________ when the offer letter included the
picture of a ________.
A)
increased; man rather than the picture of a woman
B)
increased; woman rather than the picture of a man
C)
decreased; either a man or a woman
D)
was unaffected; either a man or a woman

10)
Monopolistically competitive firms use advertising exclusively to inform
customers about the real differences between their products and their
competitors’ products.

11)
Advertising can create an image about a product inducing people to try the
product.

12)
Advertising can lead to more competition and lower prices for consumers.

13)
When a celebrity is endorsing a product, it is usually because the celebrity is
enthusiastic about the product.

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