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






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






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






4. Identical or substitutable






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






6. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






7. 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






8. 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)






9. 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


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






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






12. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






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






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






16. 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


17. Long-run marginal cost curve above long-run average cost






18. 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






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






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






21. 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






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






23. 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






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






25. The smallest quantity at which the average cost curve reaches its minimum






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






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






28. Price Sensitive






29. 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






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






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






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






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






34. 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






35. 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






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






37. 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






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






39. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






41. Simultaneous move game that is not repeated






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






43. 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






44. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






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






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






47. Revenue-Costs






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






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






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