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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. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






2. 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"






3. 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






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






5. 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






6. 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






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






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






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






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






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






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






13. 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






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






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






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






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






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






19. The price that is low enough to deter entry






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






21. The derivative of total revenue






22. Steel - autos - colas - airlines






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






24. The competition that domestic firms encounter from the products and services of foreign producers






25. A game that is played over and over again forever and in which players receive payoffs during each play of the game






26. 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)






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






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






29. 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






30. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling






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






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






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






34. Identical or substitutable






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






36. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






38. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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






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






41. 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


42. 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






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






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






45. 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






46. Toothpaste - shampoo - restaurants - banks






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






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






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






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