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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. 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






2. 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






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






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






5. 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






6. 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






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






8. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






12. Price Sensitive






13. 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






14. Ignoring the effects of their actions on each others' profits






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






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






17. Toothpaste - shampoo - restaurants - banks






18. Simultaneous move game that is not repeated






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






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






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






22. The derivative of total revenue






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






24. 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






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






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






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






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






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






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






31. 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






32. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






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






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






35. 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






36. Marginal cost curve above average variable cost - P* = SRMC






37. The price that is low enough to deter entry






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






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






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






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






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






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






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






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






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






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






48. The reward received by a player in a game - such as the profit earned by an oligopolist






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






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