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






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






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






4. Takes Place inside the Mind of the consumer






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






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






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






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






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






11. 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






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






13. An oligopoly in which the firms produce a differentiated product






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






15. The situation when a firm's long-run average costs fall as it increases output






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






17. Single firm is sole producer of a product for which there are no close substitutes






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






19. 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






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






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






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






23. Game in which each player makes decisions without knowledge of the other player's decisions






24. 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"






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






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






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






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






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






30. 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






31. Cooperation among firms that does not involve an explicit agreement






32. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






33. Produce identical products






34. Revenue-Costs






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






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






37. 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






38. 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






39. 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






40. 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






41. Price Sensitive






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






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






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






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






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






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






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






49. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






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