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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. 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






2. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking






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






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






5. The exclusive right to a product for a period of 20 years from the date the product is invented






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






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






8. Revenue-Costs






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






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






11. 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






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






13. 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






14. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






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






16. 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






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






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






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






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






21. 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






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






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






24. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






25. When a manager makes a noncooperative decision






26. 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






27. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






28. 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)






29. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






30. 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






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






32. A product's ability to satisfy a large number of consumers at the same time






33. 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






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






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






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






37. 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






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






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






40. In game theory - benefit obtained by party that moves first in a sequential game






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






42. 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






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






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






45. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






46. Steel - autos - colas - airlines






47. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






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






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