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Business Competition

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. A product's ability to satisfy a large number of consumers at the same time






2. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






3. Keeps the price just where it is to maximize profit






4. Revenue-Costs






5. Long-run marginal cost curve above long-run average cost






6. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






7. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






8. A table that shows the payoffs for every possible action by each player for every possible action by the other player






9. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power






10. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






11. The reward received by a player in a game - such as the profit earned by an oligopolist






12. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






13. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






14. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






15. The exclusive right to a product for a period of 20 years from the date the product is invented






16. Rival who sets its output after the leader (Stackelberg's model)






17. The price that is low enough to deter entry






18. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






19. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






20. A strategy or action that always provides the best outcome no matter what decisions rivals make






21. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






22. When the decisions of two or more firms significantly affect each others' profits






23. Marginal cost curve above average variable cost - P* = SRMC






24. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






25. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






26. Price Sensitive






27. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services






28. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






29. A simpler way to operationalize first-degree price discrimination






30. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






31. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






32. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






33. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






34. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






35. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike






36. Takes Place inside the Mind of the consumer






37. The smallest quantity at which the average cost curve reaches its minimum






38. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






39. Both players have dominant strategies and play them






40. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






41. Increases in the value of a product to each user - including existing users - as the total number of users rises






42. Simultaneous move game that is not repeated






43. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






44. Actions taken by firms to plan for and react to competition from rival firms






45. Variations on one good so that a firm can increase market sharea






46. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






47. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






48. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






49. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






50. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition







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