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






2. A situation in which neither firm has incentive to change its output given the other firm's output






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






4. 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






5. 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






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






7. 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






8. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






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






10. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






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






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






13. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






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






16. 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






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






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






19. 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)






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






21. 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






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






23. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






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






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






26. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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






28. 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






29. Revenue-Costs






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






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






32. Price Sensitive






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






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






35. 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






36. The physical characteristics of the market within which firms interact






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






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






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






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






41. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






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






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






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






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






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






47. Maximize economic profit by producing the quantity at which MC=MR






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






49. When a manager makes a noncooperative decision






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