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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. Involves price-fixing






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






3. 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






4. 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






5. 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






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






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






8. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






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






10. Demand line is above ATC curve






11. 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






12. All firms and individuals willing and able to buy or sell a particular product






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






14. 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






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






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






17. 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






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






19. Toothpaste - shampoo - restaurants - banks






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






21. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






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






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






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






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






26. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






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






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






30. Produce identical products






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






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






34. 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






35. 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)






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






37. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






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






39. 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






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






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






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






43. Rules - strategies - payoffs - outcomes






44. An oligopoly in which the firms produce a differentiated product






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






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






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






48. 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






49. 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






50. 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