Test your basic knowledge |

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. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it






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






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






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






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






6. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






7. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)






8. Rules - strategies - payoffs - outcomes






9. An oligopoly in which the firms produce a standardized product






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






11. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






12. Steel - autos - colas - airlines






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






14. Revenue-Costs






15. Game in which one player makes a move after observing the other player's move






16. When a manager makes a noncooperative decision






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






18. Demand line is above ATC curve






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






20. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






21. 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






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






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






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






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






26. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






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






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






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






30. Toothpaste - shampoo - restaurants - banks






31. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






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






33. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






36. If production of a good requires a particular input - then control of that input can be a barrier to entry






37. Produce identical products






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






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






40. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






41. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling






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






43. Price Sensitive






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






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






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






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






48. 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






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






50. 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