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






2. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






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






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






5. 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






6. 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






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






8. When a manager makes a noncooperative decision






9. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






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






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






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






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






14. 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






15. 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)






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






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






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






19. 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






20. 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






21. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






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






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






24. Takes Place inside the Mind of the consumer






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






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






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






28. The derivative of total revenue






29. 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)






30. 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






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






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






33. 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






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






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






36. Steel - autos - colas - airlines






37. Identical or substitutable






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






39. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






40. 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






41. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






42. 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






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






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






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






46. Price Sensitive






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






49. Toothpaste - shampoo - restaurants - banks






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