AMA Exam PCM Topic 5 Question 95 Discussion

Actual exam question for AMA's PCM exam

Question #: 95
Topic #: 5

[All PCM Questions]

Pop-Mart, a chain of discount stores in the U.S., procures its products from many suppliers. Indigo is one among hundreds of other suppliers who supply poultry products to Pop-Mart and other retailers. The price of the products is often dictated by the demand from consumers. Which of the following is true of this scenario?

APop-Mart's competition with other retailers represents pure competition.

BIndigo is competing in an oligopolistic market and depends on competitors to increase product prices.

CIndigo can carve an identity for itself and move into a monopolistically competitive market by branding its poultry products.

DPop-Mart's suppliers cannot decommoditize their products in order to make more money.

EThe large number of suppliers indicates that the poultry industry indicates monopolistic competition.

Show Suggested Answer

Suggested Answer: C

by Graciela at Aug 25, 2024, 08:37 AM

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Bobbye

4 days ago

E makes sense too. With all those suppliers, it sounds like a monopolistically competitive market to me.

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Marsha

5 days ago

Ha! 'Decommoditize' their products? I'd like to see them try. The poultry industry is about as commodity as it gets.

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Karima

6 days ago

I think B is also a viable option. If Indigo is one of the few major suppliers, it could potentially collude with other suppliers to keep prices high.

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Isabelle

7 days ago

The correct answer is C. Indigo can carve an identity for itself and move into a monopolistically competitive market by branding its poultry products. This allows for product differentiation and gives Indigo more control over pricing.

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