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






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






3. 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






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






5. 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






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






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






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






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






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






11. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






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






14. 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.)






15. 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






16. 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






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






18. Face competition from companies that currently are not in the market but might enter






19. Revenue-Costs






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






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






22. 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






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






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






25. 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






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






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






28. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






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






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






32. 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






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






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






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






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






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






38. 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






39. Demand line is above ATC curve






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






41. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






43. Variations on one good so that a firm can increase market sharea






44. 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






45. The price that is low enough to deter entry






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






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






48. All firms and individuals willing and able to buy or sell a particular product






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






50. Identical or substitutable