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






2. Both players have dominant strategies and play them






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






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






5. 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






6. 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






7. 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.)






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






9. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






10. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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






12. 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






13. 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






14. 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






15. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends






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






17. 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






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






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






20. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






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






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






27. Produce identical products






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






29. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






30. 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






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






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






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






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






35. The smallest quantity at which the average cost curve reaches its minimum






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






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






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






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






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






41. Demand line is above ATC curve






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






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






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






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






46. 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






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






48. 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






49. Steel - autos - colas - airlines






50. 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