tango_gs

Strawline, Inc. manufactures straws using blown-film extruders. Strawline is planning to purchase a new machine which is based on a new technology. Before making this purchase, however, the company wants to perform a demand/supply analysis as recommended by Porter. Which of the following is least likely a component of a demand/supply analysis?

A) Prospect of a foreign competitor entering the industry.

B) Historical relationship between gross domestic product (GDP) growth and the growth in company revenues.

C) Impact of changes in the national taxation policy.

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Each of these factors except the tax policy would be a part of industry demand and supply analysis.

tango_gs

Wanda Brunner, CFA, has prepared a report with the following sub-headings:

• Industry Summary.
• Product Segmentation.
• Industry concentration.
• Ease of industry entry.
• Supply input price.

Her report is most likely about:

A) Industry pricing practices.

B) Porter's five forces.

C) Demand and supply analysis.

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Industry pricing practices are most affected by the following factors:

• Product Segmentation.
• Industry concentration.
• Ease of industry entry.
• Supply input price.

tango_gs

Which of the following is NOT a factor that affects industry pricing practices?

A) Ease of industry entry.

B) Product segmentation.

C) Product convexity.

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Product convexity is not a factor that affects industry pricing practices. The four factors that affect industry pricing practices include product segmentation, the degree of industry concentration, the ease of industry entry, and price changes in key supply inputs.

tango_gs

There are at least four factors that contribute to a firm’s profitability and pricing decisions. All of the following are factors that firms consider when establishing their pricing practices EXCEPT:

A) ease of entry into the industry.

B) product segmentation.

C) product demographics.

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The four factors that affect industry pricing practices are product segmentation, degree of industry concentration, ease of industry entry, and price changes in key supply inputs.