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






2. All firms and individuals willing and able to buy or sell a particular product






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






4. 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






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






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






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






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






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






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






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






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






13. 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






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






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






16. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






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






18. 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






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






20. 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






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






22. Price Sensitive






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






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






25. 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






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






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






28. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






30. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking






31. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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






33. 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






34. Toothpaste - shampoo - restaurants - banks






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






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






37. In game theory - benefit obtained by party that moves first in a sequential game






38. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related 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. Cooperation among firms that does not involve an explicit agreement






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






42. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends






43. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






44. A combination of two or more companies into one company






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






46. Both players have dominant strategies and play them






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






48. 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






49. Involves price-fixing






50. The practice of bundling several different products together and selling them at a single "bundle" price