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






3. 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






4. 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






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. Keeps the price just where it is to maximize profit






7. Simultaneous move game that is not repeated






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






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






10. Demand line is above ATC curve






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






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






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






14. 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






15. 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






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






17. The derivative of total revenue






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






19. Single firm is sole producer of a product for which there are no close substitutes






20. 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






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






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






23. 1/(1+i)n






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






25. 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)






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






27. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






28. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






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






30. Takes Place inside the Mind of the consumer






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






32. 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






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






34. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






35. 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






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






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






38. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






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






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






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






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






43. 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






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






45. Revenue-Costs






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






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






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






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






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