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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 representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






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






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






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






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






6. Maximize economic profit by producing the quantity at which MC=MR






7. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






8. 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






9. When managers are able to charge each consumer their reservation price. Examples are car and home sales






10. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






12. 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






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






14. Steel - autos - colas - airlines






15. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






16. Using advertising and other means to try to increase a firm's sales






17. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount






18. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






19. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






20. 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






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






22. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






23. 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






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






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






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






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






28. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






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






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. Actions taken by a firm to achieve a goal - such as maximizing profits






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






33. Price Sensitive






34. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






35. The physical characteristics of the market within which firms interact






36. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






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






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






39. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






40. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry






41. 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






42. Demand line is above ATC curve






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






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






45. First firm to set its output (Stackelberg's model)






46. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






47. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






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






49. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






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