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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. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






2. 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.)






3. When a manager makes a noncooperative decision






4. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






5. 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






6. Identical or substitutable






7. A simpler way to operationalize first-degree price discrimination






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






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






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






11. The practice of charging different prices to consumers for the same good or service






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. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






16. Produce identical products






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






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






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






20. 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






21. 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






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






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






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






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






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






27. Both players have dominant strategies and play them






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






29. Rules - strategies - payoffs - outcomes






30. 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






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






32. 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)






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






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






35. Involves price-fixing






36. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






37. Takes Place inside the Mind of the consumer






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






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






40. 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






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






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






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






44. 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






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






46. Demand line is above ATC curve






47. 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"






48. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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49. Face competition from companies that currently are not in the market but might enter






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