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






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






3. Simultaneous move game that is not repeated






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






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






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






7. 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






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






9. 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






10. 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)






11. Price Sensitive






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






13. Produce identical products






14. 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






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






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






17. Revenue-Costs






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






19. The derivative of total revenue






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






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






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






23. 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"






24. 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






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






26. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike






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






28. 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






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






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






31. When the decisions of two or more firms significantly affect each others' profits






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






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






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






35. The smallest quantity at which the average cost curve reaches its minimum






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






37. 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.)






38. A situation where one firm is able to provide a service at a lower cost than could several competing firms






39. 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






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






41. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






44. Variations on one good so that a firm can increase market sharea






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






46. Involves price-fixing






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






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






49. 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)






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







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