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






2. 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






3. 1/(1+i)n






4. 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.)






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






6. 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






7. 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






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. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






10. 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






11. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






13. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






15. 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






16. Revenue-Costs






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






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






19. 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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20. 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






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






22. 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"






23. 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






24. 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)






25. A game that is played over and over again forever and in which players receive payoffs during each play of the game






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






27. 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)






28. 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)






29. Demand line is above ATC curve






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






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






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






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






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






35. 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






36. When a manager makes a noncooperative decision






37. Rules - strategies - payoffs - outcomes






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






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






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






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






42. Toothpaste - shampoo - restaurants - banks






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






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






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






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






47. Game in which each player makes decisions without knowledge of the other player's decisions






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






49. In game theory - benefit obtained by party that moves first in a sequential game






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