MQM 385 Chapter 3 Questions and
Answers 100% Solved
Which of the following is a feature of a consolidated industry? - 🧠 ANSWER
✔✔*A. A consolidated industry has the potential to be highly profitable.*
B. A consolidated industry is dominated by a large number of small firms.
C. A consolidated industry does not allow firms to set prices.
D. A consolidated industry has low entry barriers.
,(A consolidated industry is dominated by a few firms, or even just one firm,
and has the potential to be highly profitable.)
Which of the following statements about the five forces in the U.S. airline
industry is true? - 🧠 ANSWER ✔✔A. Substitutes are not readily available
since customers cannot use other means of transport.
B. Taken together, the competitive forces are quite favorable for generating
a profit potential in the airline industry.
*C. The combination of the competitive forces leads to intense rivalry
among existing airlines.*
D. Entry barriers in the airline industry are relatively high because of the
high costs involved.
(As discussed in Strategy Highlight 3.2, taken together, the competitive
forces are quite unfavorable for generating a profit potential in the airline
industry: low entry barriers, high supplier power, high buyer power
combined with low customer switching costs, and the availability of low-cost
, substitutes. This type of hostile environment leads to intense rivalry among
existing airlines and low overall industry profit potential.)
Restrictions imposed by the government, such as export quotas on certain
products, are a part of the _____ of the PESTEL framework. - 🧠 ANSWER
✔✔A. economic environment
B. sociocultural environment
C. ecological environment
*D. political environment*
(The political environment describes the processes and actions of
government bodies that can influence the decisions and behavior of firms.
Governments, for example, can affect firm performance by exerting political
pressure on companies.)
Incumbent firms can benefit from several important sources of entry
barriers. Economies of scale are one such source. Which of the following is
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Answers 100% Solved
Which of the following is a feature of a consolidated industry? - 🧠 ANSWER
✔✔*A. A consolidated industry has the potential to be highly profitable.*
B. A consolidated industry is dominated by a large number of small firms.
C. A consolidated industry does not allow firms to set prices.
D. A consolidated industry has low entry barriers.
,(A consolidated industry is dominated by a few firms, or even just one firm,
and has the potential to be highly profitable.)
Which of the following statements about the five forces in the U.S. airline
industry is true? - 🧠 ANSWER ✔✔A. Substitutes are not readily available
since customers cannot use other means of transport.
B. Taken together, the competitive forces are quite favorable for generating
a profit potential in the airline industry.
*C. The combination of the competitive forces leads to intense rivalry
among existing airlines.*
D. Entry barriers in the airline industry are relatively high because of the
high costs involved.
(As discussed in Strategy Highlight 3.2, taken together, the competitive
forces are quite unfavorable for generating a profit potential in the airline
industry: low entry barriers, high supplier power, high buyer power
combined with low customer switching costs, and the availability of low-cost
, substitutes. This type of hostile environment leads to intense rivalry among
existing airlines and low overall industry profit potential.)
Restrictions imposed by the government, such as export quotas on certain
products, are a part of the _____ of the PESTEL framework. - 🧠 ANSWER
✔✔A. economic environment
B. sociocultural environment
C. ecological environment
*D. political environment*
(The political environment describes the processes and actions of
government bodies that can influence the decisions and behavior of firms.
Governments, for example, can affect firm performance by exerting political
pressure on companies.)
Incumbent firms can benefit from several important sources of entry
barriers. Economies of scale are one such source. Which of the following is
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
