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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. Takes Place inside the Mind of the consumer






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






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






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






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






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






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






8. The situation when a firm's long-run average costs fall as it increases output






9. 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






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






11. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






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






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






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






15. 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






16. Revenue-Costs






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






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






19. 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






20. 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






21. 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






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






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






24. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends






25. 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






26. Produce identical products






27. Involves price-fixing






28. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






29. 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)






30. 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






31. 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






32. Rules - strategies - payoffs - outcomes






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






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






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






36. 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






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






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






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






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






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






42. 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






43. Game in which one player makes a move after observing the other player's move






44. 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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45. Price Sensitive






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






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






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






49. 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






50. 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







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