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






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






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






4. 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






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






6. 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






7. 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






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






9. Actions taken by a firm to achieve a goal - such as maximizing profits






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






11. 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






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






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






14. 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






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






16. 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






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






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






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






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






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






22. Cooperation among firms that does not involve an explicit agreement






23. 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






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






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






26. 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)






27. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






28. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






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






30. 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)






31. 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






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






33. 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






34. Keeps the price just where it is to maximize profit






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






36. Revenue-Costs






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






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






39. Simultaneous move game that is not repeated






40. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






42. 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






43. 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






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






45. The derivative of total revenue






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






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






48. 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






49. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






50. Takes Place inside the Mind of the consumer