Section B (40 marks for 30 questions) Attempt ALL multiple choice questions from this Section - select the best choice. 1. The average cost to produce a bottle of vitamin water is $4 while its average selling price is \$7. If StoreAll makes the same product for \$3 per bottle and sells it for \$7 per bottle, it has ... A. a competitive advantage in the industry. B. a competitive disadvantage in the industry. C. competitive parity with other firms in the industry. D. formed a strategic alliance. 2. To determine how its industry affects profitability, managers should focus on A. the barriers to entry and exit within the industry B. the pricing methods used within the industry C. the brand strategies of well-established firms in the industry D. the strategic position that the firm occupies within the industry 3. Which of the following scenarios represents a balanced stakeholder strategy? A. A strategy which primarily aims to maximize the wealth of shareholders. B. Paying employees the least in the industry so that buyers get the best price. C. Distributing 70 percent of annual profits after taxes as dividends to sharcholders, while distributing the remainder to employees and the community investing it in research. D. Fully exploiting free natural resources so that most of the profits are paid out as dividends. 4. The primary objective of the five forces model is to A. replace a firm's competitive advantage with competitive parity. B. break down a firm's value chain activities into primary and support. C. reduce the gap between the value of a firm's product and its cost of production. D. understand the profit potential of different industries. 5. Burger Cult operates in a monopolistically competitive industry while Citizen Telecom has a monopoly. Which of the following is most likely true? A. The threat of new entrants will be higher for Burger Cult than Citizen Telecom. B. Burger Cult will have more pricing power than Citizen Telecom. C. Burger Cult will have more profit potential than Citizen Telecom. D. The number of buyers will be limited for both Burger Cult and Citizen Telecom. 6. The travel industry was previously controlled by a few large agents that booked air tickets, ground transportation, and hotels for their customers. As smaller travel agencies emerged and customers started making their own reservations ... A. The travel industry has changed from a fragmented structure to a consolidated structure. B. The pricing power of the incumbent firms in the travel industry has increased. C. The bargaining power of buyers in the travel industry has increased. D. The travel industry has changed from monopolistic to oligopolistic competition