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






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






3. 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






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






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 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






7. 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






8. 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






9. 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.)






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






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






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






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






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






16. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






18. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears






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






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






21. Demand line is above ATC curve






22. 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






23. 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






24. 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






25. When a manager makes a noncooperative decision






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






27. Identical or substitutable






28. 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






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






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






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






32. 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






33. Revenue-Costs






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






35. Price Sensitive






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






37. First firm to set its output (Stackelberg's model)






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






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






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






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






42. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






44. 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)






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






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






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






48. 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






49. 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






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