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






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






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






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






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






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






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






8. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






9. Revenue-Costs






10. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






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






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






14. 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"






15. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






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






17. 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






18. 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






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






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






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






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






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






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






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






26. 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






27. 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






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






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






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






31. 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


32. The competition for sales between the products of one industry and the products of another industry






33. 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






34. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






36. Involves price-fixing






37. 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






38. 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






39. 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






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






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






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






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






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






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






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






47. Simultaneous move game that is not repeated






48. 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


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






50. 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






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