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






2. 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






3. Both players have dominant strategies and play them






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






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






6. Steel - autos - colas - airlines






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






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






9. In game theory - a decision rule that describes the actions a player will take at each decision point






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






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






13. Rules - strategies - payoffs - outcomes






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






15. 1/(1+i)n






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






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






18. 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






19. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






23. The competition that domestic firms encounter from the products and services of foreign producers






24. Revenue-Costs






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






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






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






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






29. Toothpaste - shampoo - restaurants - banks






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






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






32. 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






33. 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






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






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






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






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






38. 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






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






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






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






42. 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






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






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






45. 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






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






47. The practice of charging different prices to consumers for the same good or service






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






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






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