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






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






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






4. 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






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






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






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






8. Takes Place inside the Mind of the consumer






9. 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






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






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






12. Simultaneous move game that is not repeated






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






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






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






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






17. The price that is low enough to deter entry






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






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






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






21. 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






22. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






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






24. Produce identical products






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






26. 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






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






28. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






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






31. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






32. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






33. 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






34. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






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






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






41. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






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






43. When a manager makes a noncooperative decision






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






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






46. A firm whose price decisions are tacitly accepted and followed by others in the industry






47. 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"






48. 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






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






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