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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 measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






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






3. 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






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






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






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






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






8. 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






9. 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






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






11. Involves price-fixing






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






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






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






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






16. 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






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






18. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry






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






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






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






22. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






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






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






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






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






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






28. 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






29. 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"






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






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






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






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






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






35. Produce identical products






36. Demand line is above ATC curve






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






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






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






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






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






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






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






44. 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






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






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






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






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






49. 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






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