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






2. 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






3. 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






4. 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






5. Revenue-Costs






6. 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.)






7. 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






8. Increases in the value of a product to each user - including existing users - as the total number of users rises






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






10. The price that is low enough to deter entry






11. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






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






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






15. Face competition from companies that currently are not in the market but might enter






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






17. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade






18. 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






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






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






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






22. 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






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






24. Produce identical products






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






26. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






27. 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






28. A situation in which neither firm has incentive to change its output given the other firm's output






29. 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






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






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






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






33. 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






34. The derivative of total revenue






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






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






37. Identical or substitutable






38. 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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39. 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






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






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






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






43. 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)






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






45. 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






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






47. 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






48. 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






49. Toothpaste - shampoo - restaurants - banks






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