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






2. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






3. 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






4. The price that is low enough to deter entry






5. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






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






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






8. Rules - strategies - payoffs - outcomes






9. Revenue-Costs






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






11. 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






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






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






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






15. The derivative of total revenue






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






17. Increases in the value of a product to each user - including existing users - as the total number of users rises






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






19. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






20. 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






21. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






24. 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






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






27. Involves price-fixing






28. 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






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






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






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






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






34. Identical or substitutable






35. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






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






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






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






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






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






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






43. Demand line is above ATC curve






44. 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






45. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






47. 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






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






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






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







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Can you answer 50 questions in 15 minutes?


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