Test your basic knowledge |

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






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






3. Game in which each player makes decisions without knowledge of the other player's decisions






4. 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






5. Steel - autos - colas - airlines






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






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






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






9. Price Sensitive






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






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






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






13. 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






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






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






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






17. 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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18. 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






19. Demand line is above ATC curve






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






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






22. 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






23. 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






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






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. 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






27. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






30. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






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






32. Using advertising and other means to try to increase a firm's sales






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






34. A strategy or action that always provides the best outcome no matter what decisions rivals make






35. 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






36. 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






37. Produce identical products






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






39. 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






40. Revenue-Costs






41. 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






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






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






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






45. 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






46. 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






47. The price that is low enough to deter entry






48. 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






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






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