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. 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






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






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






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






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






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






7. The price that is low enough to deter entry






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






9. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






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






11. 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






12. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






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






15. 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






16. 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






17. Steel - autos - colas - airlines






18. Both players have dominant strategies and play them






19. 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.)






20. Takes Place inside the Mind of the consumer






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






22. A table that shows the payoffs for every possible action by each player for every possible action by the other player






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






24. 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






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






26. 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






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






28. A situation in which no one wants to change his or her behavior






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






30. 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






31. 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)






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






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






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






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






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






37. 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






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






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






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






41. The smallest quantity at which the average cost curve reaches its minimum






42. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






43. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services






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






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






46. 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






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






48. A simpler way to operationalize first-degree price discrimination






49. 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






50. 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