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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 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






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






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






4. 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






5. 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






6. A strategy or action that always provides the best outcome no matter what decisions rivals make






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






8. 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






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






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






11. Produce identical products






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






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






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






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






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






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






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






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






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






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






22. Variations on one good so that a firm can increase market sharea






23. 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






24. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






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






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






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






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






30. 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






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






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






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






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






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






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






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






38. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






40. 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






41. 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






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






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






44. Takes Place inside the Mind of the consumer






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






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






48. 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)






49. 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






50. 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