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






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






3. 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






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






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






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. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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






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






10. Toothpaste - shampoo - restaurants - banks






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






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






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






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






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






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






17. 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






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






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






20. 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






21. 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)






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






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






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






25. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






26. 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






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






28. 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






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






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






31. The price that is low enough to deter entry






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






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






34. A product's ability to satisfy a large number of consumers at the same time






35. 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






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






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






38. 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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39. 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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40. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






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






42. 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"






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






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






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






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






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






48. The smallest quantity at which the average cost curve reaches its minimum






49. 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






50. Revenue-Costs