When PepsiCo Purchased Frito-Lay and Expanded Its Operations into the Snack-Food

question 27

Multiple Choice

When PepsiCo purchased Frito-Lay and expanded its operations into the snack-food business, it was pursuing a ________ strategy.

• A)vertical integration
• B)market penetration
• C)diversification
• D)market development

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Definitions:

Long-Run Equilibrium

A state in a market where all resources are optimally allocated and economic forces are balanced, with no tendency for change until external conditions change.

Perfect Competition

A market structure characterized by many sellers and buyers, homogeneous products, and free entry and exit, resulting in price takers.

Economic Profit

The difference between a business's total revenue and its total costs, including both explicit and implicit costs.

Long-Run Supply Curve

A graphical representation showing the relationship between price and quantity supplied over time, factoring in adjustments in factors of production.