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






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






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






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






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






6. Identical or substitutable






7. 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






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






9. 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






10. 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

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11. 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






12. Simultaneous move game that is not repeated






13. When a manager makes a noncooperative decision






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






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






16. Revenue-Costs






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






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






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






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






21. 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.)






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






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






24. 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






25. Steel - autos - colas - airlines






26. The physical characteristics of the market within which firms interact






27. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






28. 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






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






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






31. 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






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






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






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






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






36. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






37. 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






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






39. 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






40. 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






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






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






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






44. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






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






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






47. Takes Place inside the Mind of the consumer






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






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






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







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