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






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






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






4. Steel - autos - colas - airlines






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






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






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






8. A strategy or action that always provides the best outcome no matter what decisions rivals make






9. 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






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






11. 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"






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






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






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






15. 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






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






17. 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)






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






19. Maximize economic profit by producing the quantity at which MC=MR






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






21. 1/(1+i)n






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






23. 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






24. Toothpaste - shampoo - restaurants - banks






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






26. 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)






27. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






29. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






31. 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






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






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






34. 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






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






36. 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)






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






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






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






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






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






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






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






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






45. 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






46. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






48. 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






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






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