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






2. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






3. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike






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






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






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






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






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






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






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






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






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






13. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






15. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






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






17. 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






18. Variations on one good so that a firm can increase market sharea






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






20. When the decisions of two or more firms significantly affect each others' profits






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






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






23. A product's ability to satisfy a large number of consumers at the same time






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






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






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






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






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






29. 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






30. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies






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






32. 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






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. Price Sensitive






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






36. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






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






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






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






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






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






42. Involves price-fixing






43. 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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44. 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






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






46. 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






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






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






49. 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)






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