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






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






3. Toothpaste - shampoo - restaurants - banks






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






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






6. Takes Place inside the Mind of the consumer






7. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






8. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






9. 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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10. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






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






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






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






15. 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






16. 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






17. 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






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






19. 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)






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






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






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






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






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






25. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)






26. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






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






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






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






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






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






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






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






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






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






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






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






38. Demand line is above ATC curve






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






40. Game in which one player makes a move after observing the other player's move






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






42. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






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






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






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






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






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






48. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






49. 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






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