Question 1

Suppliers set the baseline for a firm's costs.

Accepted Answer

A) True 
 B)False

Question 2

Price competition within an oligopoly of firms with identical products drives profits to:

Accepted Answer

A)   about 15% return on equity
B)   zero
C)   about 5 percent return on equity
D)   about 10% return on equityE) B) and C)
F) A) and B)

Question 3

Strong substitutes can set a limit on the prices firms may charge for their products or services.

Accepted Answer

A) True 
 B)False

Exam 2: Industry Analysis

Suppliers set the baseline for a firm's costs.