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






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






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






4. 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)






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






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






7. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






8. 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






9. Steel - autos - colas - airlines






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






11. 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






12. 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






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






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






16. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






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






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






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






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






21. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






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






24. An oligopoly in which the firms produce a standardized product






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






26. When a manager makes a noncooperative decision






27. 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






28. 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






29. Cooperation among firms that does not involve an explicit agreement






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






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






32. Toothpaste - shampoo - restaurants - banks






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






34. 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.)






35. 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






36. 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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37. 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






38. Both players have dominant strategies and play them






39. 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






40. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






41. The practice of bundling several different products together and selling them at a single "bundle" price






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






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






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






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






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






47. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






48. 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)






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






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