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Question
Firms in industries characterized by increasing returns will often use the objective of maximizing market share and a penetration pricing strategy.Answer
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Related questions
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What are the factors that determine whether switching to a new technology will benefit a firm?
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Once a new product design becomes a dominant design:
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B. it becomes difficult for competitors to imitate.
C. the architecture on which the industry can focus its efforts is destabilized.
D. the product design is adopted by the majority of producers.
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When a technology's performance is plotted against the amount of effort and money invested in the technology, it typically shows slow initial improvement, then accelerated improvement, then diminishing improvement.
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S-curves in technology performance and s-curves in technology diffusion are fundamentally different processes.
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The path a technology follows through time is termed as technology trajectory.
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B. incubator economies
C. virtual economies
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Firms often form alliances with competitors to jointly work on an innovation project or to exchange information in pursuit of innovation.
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Which of the following is true of externalities?
A. All externalities are negative in nature.
B. They are only borne by individuals responsible for creating them.
C. Technological innovation results in complete eradication of negative externalities.
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Technological innovations increase:
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B. product life cycles.
C. the time required for product development and introduction.
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Technological innovation decreases the amount of output achievable from a given quantity of labor and capital.
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The influence of a dominant design can extend beyond its own technology cycle.
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A legally induced adherence to a dominant design is not possible.
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Network externalities cannot arise in markets that do not have physical networks.
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The learning curve indicates that the more units a company produces of an item, the more each unit will cost.
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What are the factors that determine whether switching to a new technology will benefit a firm?
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How can the s-curves be used as a prescriptive tool? What would be the limitations of this approach?
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Once a new product design becomes a dominant design:
A. the product is no longer profitable.
B. it becomes difficult for competitors to imitate.
C. the architecture on which the industry can focus its efforts is destabilized.
D. the product design is adopted by the majority of producers.
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Iris is quite skeptical about new innovations and is most likely to adopt something new only after experiencing peer pressure to adopt the new innovation. However, she is not so risk averse that she will wait until all uncertainty of a new technology has been resolved; she is willing to accept a little uncertainty if her peers already use the product. Which of the following adopter categories does Iris belong to?
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BioMark Lifesystems Inc. wanted to enhance the adoption of its new diagnostic substances by medical laboratories. It made an agreement with the dominant producer of syringes and test tubes to have its diagnostic substances sold to laboratories in a package along with the syringes and tubes. Such an arrangement is known as:
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Speeding Horse Inc., a leader in the video game console market, is making its new generation consoles backward compatible with its previous games. This means that:
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B. it is providing a significant incentive to the owners of its previously developed consoles to buy the new console.
C. the transition of customers through product generations will become impossible.
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Maverick Systems Inc. is a leading company in the mobile phone market, and profits from its mobile phones are very high. Maverick Systems has developed a new generation of smartphones, which is better than its existing line of smartphones, and has decided to embrace cannibalization of its existing line of smartphones. This means that the company is going to:
A. introduce the new technology right away and increase its market lead while taking away profits from its existing line of smartphones.
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C. use up most of its financial resources in promoting the new phone.
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If a firm's objective is maximum market skimming, it will initially set a high price on new products.
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Preadvertised products that are not actually on the market yet and may not even exist are referred to as _____.
A. substitute products
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C. consignments
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In the context of a firm's product diffusion curve, when there is a chasm between early adopters and early majority customers:
A. the firm must reduce its production capacity.
B. the firm should improve its efficiency to target the mass market.
C. the early majority market becomes saturated.
D. the early majority market is ready to buy the product.