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






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






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






4. 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






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






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






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






8. Increases in the value of a product to each user - including existing users - as the total number of users rises






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






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






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






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






13. 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






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






15. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






18. The smallest quantity at which the average cost curve reaches its minimum






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






20. Rules - strategies - payoffs - outcomes






21. Involves price-fixing






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






23. 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






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






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






26. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






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






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






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






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






33. 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






34. 1/(1+i)n






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






36. The price that is low enough to deter entry






37. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






38. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






39. 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






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






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






42. Produce identical products






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






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






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






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






47. 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

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48. 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






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






50. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours