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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 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






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






3. 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






4. Steel - autos - colas - airlines






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






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






7. Toothpaste - shampoo - restaurants - banks






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






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






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






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






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






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






14. Involves price-fixing






15. 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






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






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






18. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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19. 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






20. 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)






21. Single firm is sole producer of a product for which there are no close substitutes






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






23. 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"






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






25. The derivative of total revenue






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






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






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






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






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






31. Revenue-Costs






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






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






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






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






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






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






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






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






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






41. 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






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






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






44. 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






45. 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






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






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






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






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






50. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it