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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 strategy that guarantees the highest payoff given the worst possible scenario






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






3. 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






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






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






6. 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






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






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






9. Price Sensitive






10. 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






11. The competition for sales between the products of one industry and the products of another industry






12. 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






13. 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"






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






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






16. 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






17. Produce identical products






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






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






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






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






22. 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






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






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






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






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






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






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






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






30. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






31. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






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






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






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






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






36. Rules - strategies - payoffs - outcomes






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






38. 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






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






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






41. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






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






43. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






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






45. The price that is low enough to deter entry






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






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






48. 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






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






50. 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






Can you answer 50 questions in 15 minutes?



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