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






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






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






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






5. 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






6. 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






7. The derivative of total revenue






8. 1/(1+i)n






9. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






11. 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






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






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






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






15. 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






16. Long-run marginal cost curve above long-run average cost






17. 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






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






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






20. 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






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






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






23. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






24. Toothpaste - shampoo - restaurants - banks






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






26. When the decisions of two or more firms significantly affect each others' profits






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






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






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






30. Demand line is above ATC curve






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






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






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






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






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






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






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






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






39. 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






40. 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






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






42. 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






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






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






46. 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






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






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






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






50. A situation where one firm is able to provide a service at a lower cost than could several competing firms







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