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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 oligopoly in which the firms produce a differentiated product






2. The competition for sales between the products of one industry and the products of another industry






3. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






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






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






6. 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






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






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






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






10. 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






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






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






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






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






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






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






17. 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






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






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






20. A product's ability to satisfy a large number of consumers at the same time






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






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






23. When a manager makes a noncooperative decision






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






25. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






26. 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






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






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






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






30. 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






31. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it






32. 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






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






34. Revenue-Costs






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






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






37. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






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






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






40. 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






41. 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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42. 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






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






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






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






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






47. 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)






48. 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






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






50. A situation in which a change in price strategy by one firm affects sales and profits of another