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






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






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






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






5. 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






6. Both players have dominant strategies and play them






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






8. 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






9. Demand line is above ATC curve






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






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






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






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






15. The derivative of total revenue






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






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






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






19. An equilibrium in a game in which players cooperate to increase their mutual payoff






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






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






22. 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






23. 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.)






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






25. 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






26. 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






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






28. Steel - autos - colas - airlines






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






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






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 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






33. Revenue-Costs






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






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






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. Toothpaste - shampoo - restaurants - banks






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






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






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






42. Produce identical products






43. Increases in the value of a product to each user - including existing users - as the total number of users rises






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






45. 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






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






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. 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)






49. Identical or substitutable






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