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






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






3. Toothpaste - shampoo - restaurants - banks






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






5. 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






6. 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






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






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






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






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






11. Rules - strategies - payoffs - outcomes






12. 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






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






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






15. Simultaneous move game that is not repeated






16. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)






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






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






19. When a manager makes a noncooperative decision






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






21. 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






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






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






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






25. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






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






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






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






29. 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






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






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






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






33. 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






34. Takes Place inside the Mind of the consumer






35. 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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36. 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






37. Produce identical products






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






39. 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"






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






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






42. 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






43. 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






44. 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






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






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






47. 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






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






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






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