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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. An oligopoly in which the firms produce a differentiated product






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






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






4. 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






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






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






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






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






9. 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






10. When a manager makes a noncooperative decision






11. Takes Place inside the Mind of the consumer






12. Simultaneous move game that is not repeated






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






14. 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






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






16. When the decisions of two or more firms significantly affect each others' profits






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






18. 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






19. 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






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. Involves price-fixing






22. 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






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






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






25. 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






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






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






28. 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






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






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






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






32. Operates like the alleged Mafia. Region division of the market among the firms in the industry






33. Demand line is above ATC curve






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






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






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






37. 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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38. 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






39. Produce identical products






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






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






42. 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.)






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






44. 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






45. 1/(1+i)n






46. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






47. 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






48. Revenue-Costs






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






50. Using advertising and other means to try to increase a firm's sales