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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. Revenue-Costs






2. 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






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






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






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






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






7. Involves price-fixing






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






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






10. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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






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






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






14. Steel - autos - colas - airlines






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






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






17. The competition that domestic firms encounter from the products and services of foreign producers






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






19. 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






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






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






22. 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






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






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






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






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






27. 1/(1+i)n






28. 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






29. 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






30. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






31. Both players have dominant strategies and play them






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






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






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






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






36. The derivative of total revenue






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






38. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






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






40. Operates like the alleged Mafia. Region division of the market among the firms in the industry






41. Toothpaste - shampoo - restaurants - banks






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






43. Demand line is above ATC curve






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






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






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






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






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






49. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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