Answer methods to common questions

MKT:
Chpt 2 (strategic planning)
The collection of businesses and products that make up a company is called its business
portfolio.
In the Boston Consulting Group approach, market growth rate provides a measure of market
attractiveness.
In the Boston Consulting Group approach, relative market share serves as a measure of company
strength in the market.
Discretionary income = income remaining after deduction of taxes, social security charges, and basic
living costs.
Sound mkt strategy begins with customer analysis
In the second step of the marketing research process, research objectives should be translated
into specific information needs.
Ethnographic research is gathered where people live and work
major advantage of survey research is flexibility
Product line filing = product line extension
When General Motors provides payments or price reductions to its new car dealers as rewards
for participating in advertising and sales support programs, it is granting a promotional
allowance
Consumer use price less to judge the quality of a product when they have experience with the
product
Intermediaries play an important role in matching supply with demand
An advantage of a vertical marketing system (VMS) is that it acts as a unified system.
Administered VMS: Leadership in which type of marketing system is assumed not through
common ownership or contractual ties but through the size and power of one or a few dominant
channel members
The communicator must decide how to handle message structure issues. One issue is whether to
draw a conclusion or not.
An ad in a professional journal targeted to an audience of dentists asked dentists to recommend
Crest toothpaste to their patients. It offered toothpaste samples that dentists could buy at cost to
give to their patients to encourage patients to take better care of their teeth. The manufacturer of
Crest toothpaste was using push strategy .
Sales and profit effects of advertising are difficult to measure because of factors outside of the ad
campaign such as price and availability.
The merchant wholesaler takes over the ownership and title to goods

Chocolate industry
Top gloves
Smart phone
Nebo
Mckinsey article
Booz Hamilton article

DSC:

GER:
Chpt 3 (Sampling):
The size of the sample does not indicate whether a selected sample is
representative or not. If the sample is not selected with probability sampling
scheme, then even a very large sample can still produce biased outcomes.
Volunteer sampling: It is biased because the survey would attract only people who
have particular
view on the issues
Chpt 4 (Probability):
Probability interpretation Relative frequency (E.g. how often one outcome happens
compared to another) OR personal probability (e.g. probability I will win =/=
probability you will lose)

BSP:
In analyzing MRTSL,K, we move along an isoquant, while in analyzing MPL and MPK,
total output can change.
Income is constant along price-consumption curve
Technological improvement can hide the presence of diminishing returns
The law of diminishing returns assumes that there is one fixed input i.e. only short run
Total cost of producing 50 units =/= TC 100 units /2
Form eqn: TC = VC + FC, solve for FC, then sub Q=50
The average total cost of a given level of output is the slope of the line from the origin to
the total cost curve at that level of output.
As output increases the difference between a firms average total cost and average variable
cost curves cannot rise.
If a firm employs only one variable factor of production, labor, and the marginal product
of labor is constant, then short-run average total costs cannot rise as output rises.
The monopolist has no supply curve because the quantity supplied at any particular price
depends on the monopolists demand curve
For a monopolist, at every output level, average revenue is equal to price
A monopolist has equated marginal revenue to zero. The firm has maximized revenue
Under perfect price discrimination, marginal profit at each level of output equal P- MC
When a monopolist engages in perfect price discrimination the demand curve and the
marginal revenue curve are identical.
The manager of a firm is attempting to practice third degree price discrimination. She has
equated the marginal revenue in each of her markets. By doing this her revenues are
maximized given her level of output
Marginal costs are independent across time periods under peak-load pricing
For a two-part tariff imposed on two consumers, the entry fee is based on the consumer
surplus of the customer with lower willingness-to-pay.
Bundling products makes sense for the seller when consumers have heterogeneous
demands & firms cannot price discriminate
Indifference curve is convex to origin because of marginal rate of substitution
the market value of the firm is based on long-run profits.
When the TR and TC curves have the same slope,
they are the furthest from each other.
The demand curve facing a perfectly competitive firm is the same as its average revenue
curve and its marginal revenue curve (D = Pe = MC =MR)
At the profit-maximizing level of output, no costs are minimized

If a competitive firms marginal cost curve is U-shaped then its short run supply curve is the
upward-sloping portion of the marginal cost curve that
lies above the short run average variable cost curve, its short run supply curve is the
upward-sloping portion of the marginal cost curve that
lies above the short run average variable cost curve

In the short run, a perfectly competitive firm earning negative economic profit is on the
downward-sloping portion of its ATC curve but is on the upward-sloping portion of its AVC.
In 1970s the federal government imposed price controls on natural gas. Which of the
following statements is true? Consumers gained from the price controls, because consumer
surplus was larger than it
would have been under free market equilibrium.
An effective price ceiling causes a loss of producer surplus for certain and possibly consumer
surplus as well
Price ceilings can result in a net loss in consumer surplus when the demand curve is very
inelastic