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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. The price that is low enough to deter entry






2. 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)






3. 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






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






5. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






6. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






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






9. A simpler way to operationalize first-degree price discrimination






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






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






12. 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






13. A situation in which no one wants to change his or her behavior






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






15. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






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






17. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






18. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






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






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






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






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






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






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






25. Involves price-fixing






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






27. 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






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






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






30. 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






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






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






33. 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






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






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






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






37. 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






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






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






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






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






42. 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






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






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






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






46. Price Sensitive






47. 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"






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






49. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






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