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






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






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






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






5. Produce identical products






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






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






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






9. 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






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






11. 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






12. Rules - strategies - payoffs - outcomes






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






14. Revenue-Costs






15. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade






16. Simultaneous move game that is not repeated






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






18. 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






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






20. 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






21. 1/(1+i)n






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






23. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






27. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






28. 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






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






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






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






32. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






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






34. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






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






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






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






38. 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






39. Demand line is above ATC curve






40. 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






41. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






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






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






44. Toothpaste - shampoo - restaurants - banks






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






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






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






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






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






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