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






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






3. 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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5. 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






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






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






8. Both players have dominant strategies and play them






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






10. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






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






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






13. 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






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






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






16. 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






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






18. 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)






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






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






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






22. 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"






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






24. Identical or substitutable






25. 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






26. Demand line is above ATC curve






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






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






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






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






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






32. 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






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






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






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






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






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






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






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






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






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






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






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






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






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






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






47. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






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






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






50. 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







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Can you answer 50 questions in 15 minutes?


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