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. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






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. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking






5. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






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






7. 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






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






9. 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






10. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






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






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






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






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






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






16. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






21. A situation in which no one wants to change his or her behavior






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






23. Face competition from companies that currently are not in the market but might enter






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






25. The competition that domestic firms encounter from the products and services of foreign producers






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






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






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






29. Price Sensitive






30. 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






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






32. Marginal cost curve above average variable cost - P* = SRMC






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






34. Toothpaste - shampoo - restaurants - banks






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






36. 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)






37. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears






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






39. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






40. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






41. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






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






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






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






46. 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






47. 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






48. The practice of charging different prices to consumers for the same good or service






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






50. 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