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






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






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






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






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






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






8. The reward received by a player in a game - such as the profit earned by an oligopolist






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






10. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






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






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






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






14. 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






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






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






17. 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






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






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






20. 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






21. 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






22. When a manager makes a noncooperative decision






23. 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






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






25. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






26. The competition that domestic firms encounter from the products and services of foreign producers






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






28. 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






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






30. 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






31. 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






32. 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






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






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






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






36. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






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






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






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






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






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






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






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






44. Simultaneous move game that is not repeated






45. Price Sensitive






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






47. 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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48. 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)






49. 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






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