BACKFLOW FINAL TEST 2026
QUESTIONS WITH CORRECT
ANSWERS GRADED A+
◍ Value.
Answer: Does a firm's resources and capabilities enable the firm to respond
to environmental threats or opportunities?
◍ Oligopoly.
Answer: few buyers and sellerscan be differentiated or a homogeneous
productA higher barrier to entryA higher ability to control price through
differentiation or collusionHigher price and profits (lower quantity)
◍ According to Porter, an industry is best defined by which of the following
statements?a. an industry as the group of firms producing products that are
similar or very close substitutesfor each otherb. an industry as the group of
firms producing products that are close complements for each otherc. an
industry consisting of different firms who utilizes different inputs or
resourcesd. B and Ce. All of the above.
Answer: A
◍ Anti-Trust Laws.
Answer: Prohibit conspiracies to deny market access or suppress
competitionProhibits predatory/exclusionary conduct to acquire or maintain
a monopoly/monopsonyProhibits mergers/acquisitions that lessen
competition
◍ In the case of Walmart (2005), which of the following is not considered a
competitive advantage?.
Answer: low prices
◍ organization.
, Answer: Is a firm organized to exploit the full competitive potential of its
resources?
◍ Motivations for RBV.
Answer: • Food retail and manufacturing industries are competitive and
low-margin industries- Yet, Nestle, Walmart, and Albertsons perform better
(worse) than the industry average, why?• Airline industry is highly
competitive with total losses of $10 billion in 1990s- Southwest airlines
profits continued to grow? southwest accused of falsifying reports
article-SCP is an analysis of industry, not the firm so you can't predict the
performance of southwest
◍ 5 forces analysis of sweet jam industry-identify key threats.
Answer: threat of entry is driven by above normal return-probably don't
have high returns, also grandma can make jam so cost is low so threat of
entry is not a true threatthreat of supplier power-not big threat bc so many
fruit producers=low concentration, highly competitive so threat of supplier
is not true threatthreat of substitutes-price impacts subs. the low sugar jams
are more expensive so this is not necessarily a threat since the price is high,
its about price of subs not numberthreat of rivalry-rivalry=indentical
products. advertising decreased by 76% which means products are very
similar bc you only advertise if your product is different, slow industry
growth is something that means high rivalry. both of these=high rivalry so
this is key threatthreat of buyer power-producers are fighting for shelf space
bc retail industry is very concentrated which makes buyer power a key
threat
◍ In class, we showed that the price spread margin in the meatpacking
industry was declining over a period of increasing concentration. Does this
price trend support the prediction of SCP (yes or no) and please explain..
Answer: No, It does not because SCP predicts that a rising concentration or
reduction in the number of players, n, will lead to a larger lerner index. The
price spread statistic is proxy measure for the lerner index and thus the
declining trend does not support the predictions of SCP. (6)
QUESTIONS WITH CORRECT
ANSWERS GRADED A+
◍ Value.
Answer: Does a firm's resources and capabilities enable the firm to respond
to environmental threats or opportunities?
◍ Oligopoly.
Answer: few buyers and sellerscan be differentiated or a homogeneous
productA higher barrier to entryA higher ability to control price through
differentiation or collusionHigher price and profits (lower quantity)
◍ According to Porter, an industry is best defined by which of the following
statements?a. an industry as the group of firms producing products that are
similar or very close substitutesfor each otherb. an industry as the group of
firms producing products that are close complements for each otherc. an
industry consisting of different firms who utilizes different inputs or
resourcesd. B and Ce. All of the above.
Answer: A
◍ Anti-Trust Laws.
Answer: Prohibit conspiracies to deny market access or suppress
competitionProhibits predatory/exclusionary conduct to acquire or maintain
a monopoly/monopsonyProhibits mergers/acquisitions that lessen
competition
◍ In the case of Walmart (2005), which of the following is not considered a
competitive advantage?.
Answer: low prices
◍ organization.
, Answer: Is a firm organized to exploit the full competitive potential of its
resources?
◍ Motivations for RBV.
Answer: • Food retail and manufacturing industries are competitive and
low-margin industries- Yet, Nestle, Walmart, and Albertsons perform better
(worse) than the industry average, why?• Airline industry is highly
competitive with total losses of $10 billion in 1990s- Southwest airlines
profits continued to grow? southwest accused of falsifying reports
article-SCP is an analysis of industry, not the firm so you can't predict the
performance of southwest
◍ 5 forces analysis of sweet jam industry-identify key threats.
Answer: threat of entry is driven by above normal return-probably don't
have high returns, also grandma can make jam so cost is low so threat of
entry is not a true threatthreat of supplier power-not big threat bc so many
fruit producers=low concentration, highly competitive so threat of supplier
is not true threatthreat of substitutes-price impacts subs. the low sugar jams
are more expensive so this is not necessarily a threat since the price is high,
its about price of subs not numberthreat of rivalry-rivalry=indentical
products. advertising decreased by 76% which means products are very
similar bc you only advertise if your product is different, slow industry
growth is something that means high rivalry. both of these=high rivalry so
this is key threatthreat of buyer power-producers are fighting for shelf space
bc retail industry is very concentrated which makes buyer power a key
threat
◍ In class, we showed that the price spread margin in the meatpacking
industry was declining over a period of increasing concentration. Does this
price trend support the prediction of SCP (yes or no) and please explain..
Answer: No, It does not because SCP predicts that a rising concentration or
reduction in the number of players, n, will lead to a larger lerner index. The
price spread statistic is proxy measure for the lerner index and thus the
declining trend does not support the predictions of SCP. (6)
