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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. 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






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






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






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






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






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






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






8. 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






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






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






11. Simultaneous move game that is not repeated






12. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






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






15. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






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






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






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






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






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






22. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






23. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






24. The price that is low enough to deter entry






25. 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






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






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






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






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






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






31. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






32. 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)






33. 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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34. 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






35. 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






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






37. The derivative of total revenue






38. Demand line is above ATC curve






39. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






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






41. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






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






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






44. Identical or substitutable






45. 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






46. 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






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






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






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






50. 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