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






2. The price that is low enough to deter entry






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






4. Involves price-fixing






5. 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






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






7. 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






8. Identical or substitutable






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






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






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






12. 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






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






14. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






17. Produce identical products






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






19. 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






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






21. 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






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






23. 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)






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






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






26. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






27. 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






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






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






30. A simpler way to operationalize first-degree price discrimination






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






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






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






34. Actions taken by a firm to achieve a goal - such as maximizing profits






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






36. 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






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






38. A game that is played over and over again forever and in which players receive payoffs during each play of the game






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






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






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






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






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






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






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






46. Simultaneous move game that is not repeated






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






48. 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






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






50. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services