Test your basic knowledge |

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. When a manager makes a noncooperative decision






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






3. Involves price-fixing






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






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






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






7. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






8. 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






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






10. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






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






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






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






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






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






17. Revenue-Costs






18. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






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






20. Steel - autos - colas - airlines






21. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






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






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






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






25. Simultaneous move game that is not repeated






26. 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






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






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






29. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






30. Price Sensitive






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






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






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






34. The derivative of total revenue






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






36. The price that is low enough to deter entry






37. 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






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






39. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






40. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






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






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






43. 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






44. 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






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






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






47. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






48. 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






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






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