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






2. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






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






4. 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






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






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






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






8. Produce identical products






9. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






10. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






11. 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






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






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






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






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






16. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






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






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






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






20. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






21. Both players have dominant strategies and play them






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






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






24. 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.)






25. A situation in which a change in price strategy by one firm affects sales and profits of another






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






27. Takes Place inside the Mind of the consumer






28. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






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






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






31. 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






32. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






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






34. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






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






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






37. Rules - strategies - payoffs - outcomes






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






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






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






41. 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






42. Marginal cost curve above average variable cost - P* = SRMC






43. 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






44. Toothpaste - shampoo - restaurants - banks






45. Price Sensitive






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






47. The reward received by a player in a game - such as the profit earned by an oligopolist






48. 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"






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






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