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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. Toothpaste - shampoo - restaurants - banks






2. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






3. Operates like the alleged Mafia. Region division of the market among the firms in the industry






4. Both players have dominant strategies and play them






5. A situation in which neither firm has incentive to change its output given the other firm's output






6. In game theory - a game that is played again sometime after the previous game ends






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






8. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






9. Specific assets - Economies of scale - Excess capacity - Reputation effects






10. 1/(1+i)n






11. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






12. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






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






14. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






16. Face competition from companies that currently are not in the market but might enter






17. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






18. Steel - autos - colas - airlines






19. 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






20. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






21. 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






22. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






23. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






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






26. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






27. 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






28. An equilibrium in a game in which players cooperate to increase their mutual payoff






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






30. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears






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






32. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






33. 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






34. The derivative of total revenue






35. 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






36. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






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






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






39. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level






40. The competition that domestic firms encounter from the products and services of foreign producers






41. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






43. A situation in which no one wants to change his or her behavior






44. A situation in which a change in price strategy by one firm affects sales and profits of another






45. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor






46. A game that is played over and over again forever and in which players receive payoffs during each play of the game






47. 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






48. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade






49. In game theory - a decision rule that describes the actions a player will take at each decision point






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