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






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






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






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






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






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






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






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






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






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






11. 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






12. 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






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






14. 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






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






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






17. Both players have dominant strategies and play them






18. 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






19. An equilibrium in a game in which players cooperate to increase their mutual payoff






20. Involves price-fixing






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






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






23. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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






25. Rules - strategies - payoffs - outcomes






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






27. 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






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






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






30. Takes Place inside the Mind of the consumer






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






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






33. 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






34. 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






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






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






37. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






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






39. A firm whose price decisions are tacitly accepted and followed by others in the industry






40. Produce identical products






41. Simultaneous move game that is not repeated






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






43. Revenue-Costs






44. 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






45. The competition for sales between the products of one industry and the products of another industry






46. Specific assets - Economies of scale - Excess capacity - Reputation effects






47. 1/(1+i)n






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






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






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