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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 competition for sales between the products of one industry and the products of another industry






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






3. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






5. Identical or substitutable






6. Involves price-fixing






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






8. 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






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






10. 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






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






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






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






14. 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






15. 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






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






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






18. 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






19. The competition that domestic firms encounter from the products and services of foreign producers






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






21. When a manager makes a noncooperative decision






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






23. Using advertising and other means to try to increase a firm's sales






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






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






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






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






28. If production of a good requires a particular input - then control of that input can be a barrier to entry






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






30. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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






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






33. 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






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






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






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






38. 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






39. 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






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






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






42. 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

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






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






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






46. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






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






48. 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






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






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