Sus Bus Final Exam 2025/2026 Exam
Questions and Correct Answers | New
Update
what are subsitiutes? - 🧠ANSWER ✔✔- firms in different industries
- provide comparable utility
- considered as a choice by the buyer
- serves as a cap on WTP
Ex: southwest substitutes include amtrak, megabus and enterprise rent-a-
car
what are rivals? - 🧠ANSWER ✔✔- firms in the same industry
- provide comparable utility
- compete for the same customers
,ex: southwest rivals are other airlines
What effect do substitutes have on an industry? - 🧠ANSWER ✔✔-
decrease in sales for a product if customers are switching to other cheaper
alternatives if the price rises
- a product with several substitutes is hard to price
- in a market where there are fewer substitutes there is a higher profitability
of earning greater profits
What are industry concentration ratio (CR4) and HHI? How are they
calculated? Interpreted? - 🧠ANSWER ✔✔CR4: sum of the market share of
the 4 largest companies
o The higher the concentration ratio, the more concentrated the industry is
o Expresses the percentage of the market that is controlled by the top 4
companies
o The more highly concentrated the market is the less competitive it is
HHI: = S1^2 + S2^2 + S3^2 + S4^2
o S = market share (see day 16 post up for example)
,o Use only the top 4 firms!!!!
evaluation of CR4: - 🧠ANSWER ✔✔< 40 very competitive industry
40 - 70 moderately concentrated
> 70 highly concentrated
evaluation of HHI - 🧠ANSWER ✔✔< 1000 very competitive industry
1001 - 1800 moderately concentrated
> 1800 highly concentrated
How are concentration measures applied to assess buyer and supplier
power? - 🧠ANSWER ✔✔- The higher the concentration the harder it is to
enter the market
- When determining if a segment is concerning, it is concerning if it is not
very competitive
o If a business does not face competition is has little incentive to lower
prices or improve its products
What are the substitutes for the movie exhibition industry? What effect are
they having on the industry? - 🧠ANSWER ✔✔- Watching at home, less
people are going to the movie theaters so they are losing money
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, What is the supplier concentration for the movie exhibition industry? What
effect is it having? - 🧠ANSWER ✔✔it is highly competitive
1. Which of the following suggests a troubled movie exhibition industry?
A. Increased box office revenues.
B. Declining attendance trend.
C. Answers A and B in combination suggest a troubled industry.
D. Answers A and B each individually suggest a troubled industry.
E. Neither answers a nor b suggest a troubled industry. - 🧠ANSWER ✔✔B
1. In contrast to rivalry, the threat of substitutes:
A. Is unrelated to profitability.
B. Has a very minimal influence on a firm's profitability.
C. Involves firms and products from another industry.
D. Creates an opportunity for exhibitors to disintermediate the studios.
E. All of the above are correct. - 🧠ANSWER ✔✔C
1. Which of the following are potential solutions to the causes of people not
going to the movies?
Questions and Correct Answers | New
Update
what are subsitiutes? - 🧠ANSWER ✔✔- firms in different industries
- provide comparable utility
- considered as a choice by the buyer
- serves as a cap on WTP
Ex: southwest substitutes include amtrak, megabus and enterprise rent-a-
car
what are rivals? - 🧠ANSWER ✔✔- firms in the same industry
- provide comparable utility
- compete for the same customers
,ex: southwest rivals are other airlines
What effect do substitutes have on an industry? - 🧠ANSWER ✔✔-
decrease in sales for a product if customers are switching to other cheaper
alternatives if the price rises
- a product with several substitutes is hard to price
- in a market where there are fewer substitutes there is a higher profitability
of earning greater profits
What are industry concentration ratio (CR4) and HHI? How are they
calculated? Interpreted? - 🧠ANSWER ✔✔CR4: sum of the market share of
the 4 largest companies
o The higher the concentration ratio, the more concentrated the industry is
o Expresses the percentage of the market that is controlled by the top 4
companies
o The more highly concentrated the market is the less competitive it is
HHI: = S1^2 + S2^2 + S3^2 + S4^2
o S = market share (see day 16 post up for example)
,o Use only the top 4 firms!!!!
evaluation of CR4: - 🧠ANSWER ✔✔< 40 very competitive industry
40 - 70 moderately concentrated
> 70 highly concentrated
evaluation of HHI - 🧠ANSWER ✔✔< 1000 very competitive industry
1001 - 1800 moderately concentrated
> 1800 highly concentrated
How are concentration measures applied to assess buyer and supplier
power? - 🧠ANSWER ✔✔- The higher the concentration the harder it is to
enter the market
- When determining if a segment is concerning, it is concerning if it is not
very competitive
o If a business does not face competition is has little incentive to lower
prices or improve its products
What are the substitutes for the movie exhibition industry? What effect are
they having on the industry? - 🧠ANSWER ✔✔- Watching at home, less
people are going to the movie theaters so they are losing money
COPYRIGHT©JOSHCLAY 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE. PRIVACY
3
STATEMENT. ALL RIGHTS RESERVED
, What is the supplier concentration for the movie exhibition industry? What
effect is it having? - 🧠ANSWER ✔✔it is highly competitive
1. Which of the following suggests a troubled movie exhibition industry?
A. Increased box office revenues.
B. Declining attendance trend.
C. Answers A and B in combination suggest a troubled industry.
D. Answers A and B each individually suggest a troubled industry.
E. Neither answers a nor b suggest a troubled industry. - 🧠ANSWER ✔✔B
1. In contrast to rivalry, the threat of substitutes:
A. Is unrelated to profitability.
B. Has a very minimal influence on a firm's profitability.
C. Involves firms and products from another industry.
D. Creates an opportunity for exhibitors to disintermediate the studios.
E. All of the above are correct. - 🧠ANSWER ✔✔C
1. Which of the following are potential solutions to the causes of people not
going to the movies?
