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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. Rules - strategies - payoffs - outcomes






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






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






4. The derivative of total revenue






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






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






7. 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






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






9. Price Sensitive






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






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






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






13. Identical or substitutable






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






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. 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






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






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






19. 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






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






21. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






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






24. 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






25. 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






26. The situation when a firm's long-run average costs fall as it increases output






27. 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)






28. 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






29. 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






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






31. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






33. 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






34. 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






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






36. 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






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






38. If production of a good requires a particular input - then control of that input can be a barrier to entry






39. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






40. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






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






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






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






44. 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)






45. 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






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






47. 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






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






49. Involves price-fixing






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