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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. 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






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






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






4. 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


5. Rules - strategies - payoffs - outcomes






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






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






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






9. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






10. Takes Place inside the Mind of the consumer






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






12. 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






13. When managers are able to charge each consumer their reservation price. Examples are car and home sales






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






15. Produce identical products






16. When a manager makes a noncooperative decision






17. 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)






18. 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






19. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






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






21. 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






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






23. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






24. 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


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






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






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






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






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






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






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






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






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






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






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






37. Maximize economic profit by producing the quantity at which MC=MR






38. Using advertising and other means to try to increase a firm's sales






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






40. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






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






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






43. 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






44. 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






45. A situation in which neither firm has incentive to change its output given the other firm's output






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






47. 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"






48. Toothpaste - shampoo - restaurants - banks






49. 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






50. The price that is low enough to deter entry