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






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






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






4. 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)






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






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






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






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






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






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






11. 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






12. 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






13. 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






14. The price that is low enough to deter entry






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






16. 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






17. Involves price-fixing






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






19. 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






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






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






22. Takes Place inside the Mind of the consumer






23. Identical or substitutable






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






25. Rules - strategies - payoffs - outcomes






26. The derivative of total revenue






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






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






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






31. Using advertising and other means to try to increase a firm's sales






32. 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






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






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






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






36. 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






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






38. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






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






40. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






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






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






43. Produce identical products






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






45. Demand line is above ATC curve






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






47. 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






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






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






50. 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