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






2. 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






3. 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






4. When a manager makes a noncooperative decision






5. First firm to set its output (Stackelberg's model)






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






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






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






9. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






10. Revenue-Costs






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






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






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






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






15. 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






16. Rules - strategies - payoffs - outcomes






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






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






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






20. 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






21. 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






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






23. 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






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






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






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






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






28. 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






29. 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






30. Toothpaste - shampoo - restaurants - banks






31. 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"






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






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






34. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






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






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






37. 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






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






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






40. 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)






41. 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






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






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






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






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






46. 1/(1+i)n






47. 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






48. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






49. 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






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