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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. Takes Place inside the Mind of the consumer






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






3. 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"






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






5. The price that is low enough to deter entry






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






7. 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






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






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






10. Identical or substitutable






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






12. 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






13. 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






14. 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






15. Steel - autos - colas - airlines






16. When a manager makes a noncooperative decision






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






18. 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






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






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






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






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






23. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas


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






25. Demand line is above ATC curve






26. 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






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






29. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






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






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






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






33. 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)






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






35. The derivative of total revenue






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






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






38. 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






39. If production of a good requires a particular input - then control of that input can be a barrier to entry






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






41. 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)






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






43. 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






44. 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)






45. 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






46. Toothpaste - shampoo - restaurants - banks






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






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






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






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