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






2. 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






3. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






4. The exclusive right to a product for a period of 20 years from the date the product is invented






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






6. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






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






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






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






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






12. The competition for sales between the products of one industry and the products of another industry






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






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






15. 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






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






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






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






19. 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






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






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






22. 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






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






24. When a manager makes a noncooperative decision






25. 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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26. 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






27. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade






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






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






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






31. 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






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






33. 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"






34. Demand line is above ATC curve






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






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






37. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






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






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






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






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






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






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






44. 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






45. 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






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






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






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






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






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







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