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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. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






2. A firm whose price decisions are tacitly accepted and followed by others 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. Using advertising and other means to try to increase a firm's sales






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






7. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






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






9. Involves price-fixing






10. 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.)






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






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






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






14. 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






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






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






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






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






19. 1/(1+i)n






20. Single firm is sole producer of a product for which there are no close substitutes






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






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






23. 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)






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






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






26. 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






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






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






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






30. 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






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






32. Takes Place inside the Mind of the consumer






33. Price Sensitive






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






35. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






36. 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






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






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






39. 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






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






41. The derivative of total revenue






42. Steel - autos - colas - airlines






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






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






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






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






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






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






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






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







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