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. A simpler way to operationalize first-degree price discrimination






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






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






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






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






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






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






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






9. 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






10. 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






11. Rules - strategies - payoffs - outcomes






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






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






14. 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






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






16. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






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






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






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






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






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






22. When a manager makes a noncooperative decision






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






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






25. Takes Place inside the Mind of the consumer






26. Demand line is above ATC curve






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






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






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






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






31. Simultaneous move game that is not repeated






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






33. 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






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






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






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






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






39. 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






40. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






42. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






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






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






46. 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






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






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






49. Ignoring the effects of their actions on each others' profits






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