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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. 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






2. 1/(1+i)n






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






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






5. Revenue-Costs






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






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






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






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






10. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






11. 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






12. 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






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






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






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






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






17. Identical or substitutable






18. Takes Place inside the Mind of the consumer






19. A table that shows the payoffs for every possible action by each player for every possible action by the other player






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






21. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






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






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






24. 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






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






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






27. 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






28. Game in which each player makes decisions without knowledge of the other player's decisions






29. Rules - strategies - payoffs - outcomes






30. 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






31. Both players have dominant strategies and play them






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






33. Simultaneous move game that is not repeated






34. The derivative of total revenue






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






36. Price Sensitive






37. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






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






40. 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






41. The reward received by a player in a game - such as the profit earned by an oligopolist






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






43. 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






44. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






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






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






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






48. 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






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






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