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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 or action that always provides the best outcome no matter what decisions rivals make






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






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






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






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






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






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






8. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






10. 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






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






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






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






14. 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.)






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






16. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






17. Involves price-fixing






18. Both players have dominant strategies and play them






19. First firm to set its output (Stackelberg's model)






20. 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






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






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






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






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






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






26. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






27. The price that is low enough to deter entry






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






29. When a manager makes a noncooperative decision






30. 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






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






32. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






33. Price Sensitive






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






35. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






36. Demand line is above ATC curve






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






38. 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






39. The derivative of total revenue






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






41. 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






42. 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






43. 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






44. 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






45. 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)






46. 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






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






48. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






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






50. In game theory - a game that is played again sometime after the previous game ends







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