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






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






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






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






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






6. 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






7. 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






8. 1/(1+i)n






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






10. Simultaneous move game that is not repeated






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






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






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






14. 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






15. Rules - strategies - payoffs - outcomes






16. Both players have dominant strategies and play them






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






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






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






20. Single firm is sole producer of a product for which there are no close substitutes






21. 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)






22. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






23. 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






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






25. Steel - autos - colas - airlines






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






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






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






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






30. Demand line is above ATC curve






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






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






33. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






34. 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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35. 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






36. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






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






38. First firm to set its output (Stackelberg's model)






39. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






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






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






42. Produce identical products






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






44. Toothpaste - shampoo - restaurants - banks






45. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






47. 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






48. Specific assets - Economies of scale - Excess capacity - Reputation effects






49. 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)






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