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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. Identical or substitutable






3. Maximize economic profit by producing the quantity at which MC=MR






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






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






6. 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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7. Face competition from companies that currently are not in the market but might enter






8. 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)






9. 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






10. Demand line is above ATC curve






11. A combination of two or more companies into one company






12. 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






13. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






14. 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






15. The competition for sales between the products of one industry and the products of another industry






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






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






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






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






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






21. 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






22. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






23. 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)






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






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






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






27. 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






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






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






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






31. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






32. 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)






33. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






34. Revenue-Costs






35. 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"






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






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






38. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






39. 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






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






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






42. Involves price-fixing






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






44. 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






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






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






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






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






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






50. 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