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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. Keeps the price just where it is to maximize profit






2. The physical characteristics of the market within which firms interact






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






4. 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)






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






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






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






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






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






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






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






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






13. In game theory - benefit obtained by party that moves first in a sequential game






14. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






15. 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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16. Revenue-Costs






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






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






19. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






20. Steel - autos - colas - airlines






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






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






23. 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






24. Both players have dominant strategies and play them






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






26. 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






27. 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)






28. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






29. 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






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






31. A game that is played over and over again forever and in which players receive payoffs during each play of the game






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






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






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






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






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






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






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






39. 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






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






41. 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






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






43. 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






44. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






45. 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






46. Price Sensitive






47. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






48. 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






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






50. The derivative of total revenue