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






2. 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






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






4. 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






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






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






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






8. Price Sensitive






9. Toothpaste - shampoo - restaurants - banks






10. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






11. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






12. Demand line is above ATC curve






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






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






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






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






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






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






19. 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






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






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






22. 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






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






24. A situation in which neither firm has incentive to change its output given the other firm's output






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






26. Takes Place inside the Mind of the consumer






27. 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






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






29. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






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






32. A simpler way to operationalize first-degree price discrimination






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






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






35. 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






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






37. 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






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






39. 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






40. 1/(1+i)n






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






42. 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






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






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






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






46. 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






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






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






49. 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






50. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)