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. Toothpaste - shampoo - restaurants - banks






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






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






4. 1/(1+i)n






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






6. 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






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






8. 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






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






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






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






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






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






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






15. 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.)






16. 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






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






18. Steel - autos - colas - airlines






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






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






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






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






23. The derivative of total revenue






24. 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






25. 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






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






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






28. 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






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






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






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






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






33. 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






34. 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






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






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






37. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






38. Both players have dominant strategies and play them






39. 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"






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






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






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






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






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






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






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






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






48. Demand line is above ATC curve






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






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