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






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






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






4. 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)






5. 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






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






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






8. 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"






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






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






11. Single firm is sole producer of a product for which there are no close substitutes






12. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






13. 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






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






15. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






19. 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






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






21. 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






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






23. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






24. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






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






26. Involves price-fixing






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






28. 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






29. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






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






32. 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.)






33. Revenue-Costs






34. Identical or substitutable






35. 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






36. 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






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






38. Both players have dominant strategies and play them






39. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies






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






41. 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






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






43. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






44. Produce identical products






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






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






47. 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






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






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






50. Steel - autos - colas - airlines