Test your basic knowledge |

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






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






3. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






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






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






6. 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)






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






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






9. 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






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






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






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. 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






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






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






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






17. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






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






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






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






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






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






25. Cooperation among firms that does not involve an explicit agreement






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






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






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






29. 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






30. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






32. Rules - strategies - payoffs - outcomes






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






34. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






37. 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






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






39. Keeps the price just where it is to maximize profit






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






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






42. 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






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






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






45. 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






46. Involves price-fixing






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






48. Revenue-Costs






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






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