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






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






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






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






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






6. 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






7. Toothpaste - shampoo - restaurants - banks






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






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






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






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






12. 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






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






14. 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






15. 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)






16. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor






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






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






19. 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






20. 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






21. Revenue-Costs






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






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






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






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






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






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






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






29. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






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






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






33. Demand line is above ATC curve






34. 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






35. When a manager makes a noncooperative decision






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






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






38. The derivative of total revenue






39. Both players have dominant strategies and play them






40. 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






41. Identical or substitutable






42. 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






43. 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






44. Takes Place inside the Mind of the consumer






45. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






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






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






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






49. 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






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