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






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






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






4. Involves price-fixing






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






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






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






8. 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






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






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






11. Simultaneous move game that is not repeated






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






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






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






15. 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.)






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






17. Takes Place inside the Mind of the consumer






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






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






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






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






22. 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)






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






24. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






25. 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






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






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






28. A combination of two or more companies into one company






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






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






31. 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






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






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






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






35. 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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36. 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






37. 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






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. 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






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






41. 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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42. 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






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






44. When managers are able to charge each consumer their reservation price. Examples are car and home sales






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






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






47. Price Sensitive






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






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






50. Demand line is above ATC curve