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






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






3. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






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






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






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






7. 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






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






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






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






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






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






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






16. 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






17. Using advertising and other means to try to increase a firm's sales






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






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






20. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






25. Demand line is above ATC curve






26. 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)






27. The practice of charging different prices to consumers for the same good or service






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






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






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






31. Price Sensitive






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






33. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






35. 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)






36. 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






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






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






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






40. Variations on one good so that a firm can increase market sharea






41. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






42. 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






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






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






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






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






47. Takes Place inside the Mind of the consumer






48. 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






49. 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






50. 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