Exhibit 18

question 26

Multiple Choice

Exhibit 18.3.The following table shows the annual revenues (in millions of dollars) of a pharmaceutical company over the period 1990-2011. Excel scatterplot shown above indicates that the annual revenues have an increasing trend.Therefore,linear,exponential,quadratic and cubic models were used to fit the trend,and the following relevant information became available after applying linear regression. Refer to Exhibit 18.3.What is the revenue forecast for 2012 found by the linear trend equation?

• A)About 2 billion 149 million dollars
• B)About 2 billion and 189 million dollars
• C)About 2 billion and 334 million dollars
• D)About 2 billion and 34 million dollars

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Definitions:

Differentiated

In a market, it refers to products that are distinguished from each other through variations in quality, features, branding, or customer service.

Oligopoly

A market structure in which a few firms sell either a standardized or differentiated product, into which entry is difficult, in which the firm has limited control over product price because of mutual interdependence (except when there is collusion among firms), and in which there is typically nonprice competition.

Homogeneous Product

A product that cannot be distinguished from competing products from different suppliers.

Differentiated Product

A product that is made distinct from similar products offered by competitors through unique features, quality, branding, or other attributes.