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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. 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






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






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






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






5. Produce identical products






6. Identical or substitutable






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






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






9. Demand line is above ATC curve






10. An oligopoly in which the firms produce a standardized product






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






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






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






14. 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






15. Involves price-fixing






16. Simultaneous move game that is not repeated






17. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






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






20. 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






21. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






22. 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)






23. A situation where one firm is able to provide a service at a lower cost than could several competing firms






24. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






27. Steel - autos - colas - airlines






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






29. Operates like the alleged Mafia. Region division of the market among the firms in the industry






30. 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






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






32. 1/(1+i)n






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






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






35. 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"






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






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






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






39. A situation in which a change in price strategy by one firm affects sales and profits of another






40. 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






41. Single firm is sole producer of a product for which there are no close substitutes






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






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






44. Revenue-Costs






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






46. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






48. 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






49. 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






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