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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. First firm to set its output (Stackelberg's model)






2. 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






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






4. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking






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






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






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






8. Both players have dominant strategies and play them






9. 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






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






11. 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






12. 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






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






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






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






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






18. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






19. Rules - strategies - payoffs - outcomes






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






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






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






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






24. 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






25. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






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






27. 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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28. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






30. 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






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






32. An oligopoly in which the firms produce a differentiated product






33. 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






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






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






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






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






38. The price that is low enough to deter entry






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






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






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






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






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






44. Simultaneous move game that is not repeated






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






46. 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






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






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






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






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