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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. 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






2. 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






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






4. 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






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






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






7. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






8. Identical or substitutable






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






10. 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






11. 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






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






13. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






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






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






16. 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






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






18. The practice of bundling several different products together and selling them at a single "bundle" price






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






20. Involves price-fixing






21. 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






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






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






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






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






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






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






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






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






31. 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






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






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






34. The price that is low enough to deter entry






35. 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






36. 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






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






38. Long-run marginal cost curve above long-run average cost






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






40. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






41. 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)






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






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






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






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






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






47. 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






48. 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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49. An oligopoly in which the firms produce a differentiated product






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