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






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






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






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






5. 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






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






7. Steel - autos - colas - airlines






8. 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






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






10. Revenue-Costs






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






12. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






14. Maximize economic profit by producing the quantity at which MC=MR






15. 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






16. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






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






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






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






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






22. 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






23. 1/(1+i)n






24. 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






25. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






26. 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)






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






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






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






30. 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






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






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






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






34. 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)






35. The price that is low enough to deter entry






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






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






38. 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






39. 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






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






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






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






44. 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






45. Demand line is above ATC curve






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






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






48. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies






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






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