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






2. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






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






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






5. 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






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






7. If production of a good requires a particular input - then control of that input can be a barrier to entry






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






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






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






11. 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






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






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. A situation in which a change in price strategy by one firm affects sales and profits of another






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






16. 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






17. 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






18. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






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






20. Long-run marginal cost curve above long-run average cost






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






22. Takes Place inside the Mind of the consumer






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






24. 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






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






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






27. 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






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






29. 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






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






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






32. A game that is played over and over again forever and in which players receive payoffs during each play of the game






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






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






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






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






37. 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






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






39. 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






40. 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






41. Demand line is above ATC curve






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






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






44. 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






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






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






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






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






49. Produce identical products






50. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table