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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. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






2. The price that is low enough to deter entry






3. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






4. 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






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






6. 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






7. 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






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






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






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






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






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






13. 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"






14. Takes Place inside the Mind of the consumer






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






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. A combination of two or more companies into one company






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






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






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






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






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






23. 1/(1+i)n






24. 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






25. Simultaneous move game that is not repeated






26. A strategy that guarantees the highest payoff given the worst possible scenario






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






28. 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






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






31. 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.)






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






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






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






35. 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






36. Revenue-Costs






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






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






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






40. When a manager makes a noncooperative decision






41. Both players have dominant strategies and play them






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






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






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






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






46. 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






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






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






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






50. Demand line is above ATC curve