Test your basic knowledge |

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






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






3. 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






4. When the decisions of two or more firms significantly affect each others' profits






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






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






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






8. 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






9. 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.)






10. 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






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






12. 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






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






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






15. 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)






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






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






18. Demand line is above ATC curve






19. Steel - autos - colas - airlines






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






22. 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






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






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






25. 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






26. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






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






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






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






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






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






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






33. 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






34. Simultaneous move game that is not repeated






35. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






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






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






38. 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






39. 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






40. Involves price-fixing






41. Price Sensitive






42. 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






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






44. Cooperation among firms that does not involve an explicit agreement






45. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount






46. When a manager makes a noncooperative decision






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






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






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






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