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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 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






2. Involves price-fixing






3. Demand line is above ATC curve






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






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






6. When a manager makes a noncooperative decision






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






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






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






10. 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"






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






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






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






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. 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






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






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






18. 1/(1+i)n






19. A strategy that guarantees the highest payoff given the worst possible scenario






20. Keeps the price just where it is to maximize profit






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






22. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it






23. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






26. 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






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






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






29. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






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






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






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






33. 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)






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






35. 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






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






37. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






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






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






40. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






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






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






43. 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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44. 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)






45. 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






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






47. Produce identical products






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






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






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