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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 - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






2. Identical or substitutable






3. 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






4. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






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






7. The derivative of total revenue






8. 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






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






10. 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






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






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






13. 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






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






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






16. 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






17. Demand line is above ATC curve






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






19. 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






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






21. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






22. When a manager makes a noncooperative decision






23. The price that is low enough to deter entry






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






25. 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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26. 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






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






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






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






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






31. Rules - strategies - payoffs - outcomes






32. 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)






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






34. 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






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






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






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






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






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






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






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






42. 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






43. 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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44. 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






45. 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






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






47. 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






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






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






50. 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