Test your basic knowledge |

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. In game theory - a game that is played again sometime after the previous game ends






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






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






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






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






6. Face competition from companies that currently are not in the market but might enter






7. 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)






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






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






10. Produce identical products






11. 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






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






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






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






15. Both players have dominant strategies and play them






16. Involves price-fixing






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






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






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






20. The physical characteristics of the market within which firms interact






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






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






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






24. 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






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






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






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






28. When a manager makes a noncooperative decision






29. The smallest quantity at which the average cost curve reaches its minimum






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






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






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






33. 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






34. Toothpaste - shampoo - restaurants - banks






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






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






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






38. 1/(1+i)n






39. 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






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






41. 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






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






43. 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.)






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






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






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






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






48. 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)






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






50. Revenue-Costs