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






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






3. Identical or substitutable






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






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






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






7. 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






8. Toothpaste - shampoo - restaurants - banks






9. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)






10. 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






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






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






13. 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






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






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 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






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






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






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






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






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






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






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






24. 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






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






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






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






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






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






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






31. 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"






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






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






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






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






36. 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)






37. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






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






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






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






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






43. 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






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






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






46. Demand line is above ATC curve






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






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






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






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