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






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






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






4. 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






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






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






7. 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






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






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






10. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






12. 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






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






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






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






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






17. 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






18. 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






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






20. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






21. 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






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






23. Involves price-fixing






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






25. The derivative of total revenue






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






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






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






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






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






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






32. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry






33. 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






34. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






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






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






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






38. Identical or substitutable






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






40. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






41. 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






42. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






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






44. Variations on one good so that a firm can increase market sharea






45. Takes Place inside the Mind of the consumer






46. 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.)






47. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






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






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






50. Demand line is above ATC curve