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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. 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






2. 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.)






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






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






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






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






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






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






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






10. 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






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






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






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






14. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






16. 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"






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






18. Price Sensitive






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






20. Steel - autos - colas - airlines






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






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






23. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






24. 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






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






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






27. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






29. 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






30. 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






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






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






33. 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






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






35. 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






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






37. 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






38. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






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






42. 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






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






44. Both players have dominant strategies and play them






45. Demand line is above ATC curve






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






47. Takes Place inside the Mind of the consumer






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






49. 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)






50. When a manager makes a noncooperative decision