Global Business 3rd Edition Mike Peng – Test Bank
Chapter 11—Managing Global Competitive Dynamics
TRUE/FALSE
1. Competitive dynamics are the actions and responses undertaken by competing firms.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
2. Tacit collusions typically lead to a cartel or trust.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
3. Firms engage in explicit collusion when they indirectly coordinate actions by signaling their intention to reduce output and maintain pricing above competitive levels.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
4. Cartels are often labeled as anticompetitive and outlawed by antitrust laws.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
5. Cartel is an output- and price-fixing entity involving multiple competitors.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
6. Prisoners’ dilemma is a type of game in which the outcome depends on two parties deciding whether to cooperate or to defect.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
7. Low barriers to entry into an industry make collusion between firms difficult.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
8. An industry with heterogeneous products, in which rivals are forced to compete on price, is likely to lead to collusion.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
9. Collusion is more difficult between firms with high market commonality than firms with low market commonality.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
10. An industry without a price leader makes it easier for firms in that industry to form collusions.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
11. Price leader is a firm that sets the highest price in the industry.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
12. The price leader in a market possesses the capacity to punish.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic KEY: Bloom’s: Knowledge
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