Test your basic knowledge |

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






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






3. 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






4. 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)






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






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






7. 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






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






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






10. 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






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






12. Rules - strategies - payoffs - outcomes






13. 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






14. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






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






16. 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






17. 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






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






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






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






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






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






23. Cooperation among firms that does not involve an explicit agreement






24. Toothpaste - shampoo - restaurants - banks






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






26. 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






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






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






29. Simultaneous move game that is not repeated






30. 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






31. A product's ability to satisfy a large number of consumers at the same time






32. 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






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






34. 1/(1+i)n






35. 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






36. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






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






38. 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






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






40. 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.)






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






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






43. The price that is low enough to deter entry






44. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






46. The derivative of total revenue






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






48. Ignoring the effects of their actions on each others' profits






49. Operates like the alleged Mafia. Region division of the market among the firms in the industry






50. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist