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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 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






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






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






4. 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.)






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






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






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






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






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






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






11. The price that is low enough to deter entry






12. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






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






14. When a manager makes a noncooperative decision






15. 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






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






17. 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)






18. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






20. 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






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






22. Revenue-Costs






23. Identical or substitutable






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






25. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






26. 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






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






28. 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






29. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






30. 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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31. 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)






32. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






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






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






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






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






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






38. The derivative of total revenue






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






40. 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






41. 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






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






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






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






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






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






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






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






49. 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






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







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