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. The physical characteristics of the market within which firms interact






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






3. A situation in which a change in price strategy by one firm affects sales and profits of another






4. The competition that domestic firms encounter from the products and services of foreign producers






5. 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






6. Takes Place inside the Mind of the consumer






7. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






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






13. Both players have dominant strategies and play them






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






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






16. 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






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






18. Identical or substitutable






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






20. 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)






21. 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






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






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






24. 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






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






26. Toothpaste - shampoo - restaurants - banks






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






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






29. Revenue-Costs






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






31. Involves price-fixing






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






33. When a manager makes a noncooperative decision






34. 1/(1+i)n






35. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






36. 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)






37. Face competition from companies that currently are not in the market but might enter






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






39. 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)






40. 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






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






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






43. 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






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






45. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level






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






47. 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






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






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






50. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers