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






2. 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






3. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






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






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






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






7. 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)






8. Produce identical products






9. 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






10. Steel - autos - colas - airlines






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






12. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






13. Both players have dominant strategies and play them






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






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






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






17. Rules - strategies - payoffs - outcomes






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






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






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






21. Price Sensitive






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






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






24. 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)






25. 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






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






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






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






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






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






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






32. 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






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. 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






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






36. Identical or substitutable






37. 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






38. 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






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






40. 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






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






42. 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.)






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






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






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






46. Takes Place inside the Mind of the consumer






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






48. 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"






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






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