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






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






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






4. 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






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






6. Toothpaste - shampoo - restaurants - banks






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






8. All firms and individuals willing and able to buy or sell a particular product






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






10. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






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






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






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






14. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






15. 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.)






16. 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






17. 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






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






19. Rival who sets its output after the leader (Stackelberg's model)






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






21. Simultaneous move game that is not repeated






22. 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






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






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






25. Both players have dominant strategies and play them






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






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






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






29. Rules - strategies - payoffs - outcomes






30. Steel - autos - colas - airlines






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






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






33. 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






34. 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






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






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






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






39. 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






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






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. 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






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






44. Price Sensitive






45. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






46. 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






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






48. An oligopoly in which the firms produce a differentiated product






49. 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






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