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






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






3. 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.)






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






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






6. 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)






7. 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)






8. Identical or substitutable






9. 1/(1+i)n






10. An oligopoly in which the firms produce a differentiated product






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






12. 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






13. Simultaneous move game that is not repeated






14. 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






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






16. 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






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






18. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount






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






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






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






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






23. 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






24. Actions taken by a firm to achieve a goal - such as maximizing profits






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






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






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






28. Demand line is above ATC curve






29. 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






30. 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






31. 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






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






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






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






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






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






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






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






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






40. The derivative of total revenue






41. Steel - autos - colas - airlines






42. Both players have dominant strategies and play them






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






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






45. 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






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






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






48. 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






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






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