Question

Companies in the poultry industry control the production (feed supplies, feeding, and rearing of chickens), slaughter, and marketing of chicken. This is an example of

vertical intergration

horizontal integration

production discrimination

product diversification

Question 24

Which of the following statements best describes firms under monopolistic competition?

There is little price or quality competition.

The firms compete using quality, location, and style

Firms do not compete using advertising.

There are a few firms that collude to set the highest price

Answer 1

23. ans D

Product diversification is the practice of expanding the original market for a product. This strategy is used to increase the sales associated with an existing product line, which is especially useful for a business that has been experiencing stagnant or declining sales.

24. ans B

Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another and hence are not perfect substitutes.