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






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






3. 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"






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






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






6. 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






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






8. Both players have dominant strategies and play them






9. 1/(1+i)n






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






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






12. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






14. 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






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






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






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






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






19. 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






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






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






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






23. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


24. 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)






25. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






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






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






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






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






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






31. Identical or substitutable






32. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






33. 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






34. The price that is low enough to deter entry






35. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






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






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






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






39. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






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






42. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






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






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






46. 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






47. 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






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






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






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