Answers

1. a 6. a 11. c 16. b

2. a 7. b 12. d 17 a

3. b 8. b 13. c 18 c

4. b 9. b 14. c 19 b

5. a 10. d 15. b 20 d

1. As a result of the rapid pace of innovation, the time between a product’s introduction and its withdrawal from the market
a. has become shorter.

2. The relationship between speed of innovation and product obsolescence is
a. direct (as innovation speed increases, products become obsolete more quickly).
3. The ______ of an economy is its total annual output, measured by final purchase price.
b. gross domestic product

4. If you were the director of R&D at a large pharmaceutical company, how might you apply the …show more content…

11. In the era of incremental change, companies

c. focus on efficiency and market penetration.

12. The more a technology is adopted,
c. the more complementary goods are available for it.
13. As complementary technologies develop for an innovation, that innovation will
b. become more attractive to other firms.
14. A cell phone network recently called Bill and offered him a great plan. It was a low flat fee on all long distance calls with no roaming charges and unlimited hours to anyone else in the network. However, Bill discovered that so far there were only 3,000 network subscribers nationwide, so he turned down the offer. This company did not have
c. sufficient network externalities.
15. During the 1990s more and more people started using cell phones. As a result, the cell phone

c. became better in quality.

16. eBay uses an online payment system called PayPal which accepts credit cards or electronic funds transfers. The payment system is heavily secured using encryption technology. According to the Kim and Mauborgne model, PayPal is offering simplicity, convenience, and _____ utility levers.
d. risk

17. When customers attain their desired level of network externality benefits at lower levels of market share
c. the network externality curves flatten out sooner.

18. When are winner-take-all markets good for consumers?
b. When monopoly costs exceed the value of technological utility.

19. Most photographers, graphic designers, and other professionals who work