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






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






3. 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






4. 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






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






6. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






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






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






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






10. The practice of charging different prices to consumers for the same good or service






11. 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






12. Revenue-Costs






13. 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"






14. 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






15. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






16. The price that is low enough to deter entry






17. 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






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






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






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






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






22. 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)






23. Demand line is above ATC curve






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






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






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






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






28. Steel - autos - colas - airlines






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






30. The derivative of total revenue






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






32. 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






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






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






35. 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






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






37. A product's ability to satisfy a large number of consumers at the same time






38. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






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






40. 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






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






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






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






44. Both players have dominant strategies and play them






45. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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






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






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






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






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