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






2. 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






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






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






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






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






7. When a manager makes a noncooperative decision






8. Rules - strategies - payoffs - outcomes






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






10. Toothpaste - shampoo - restaurants - banks






11. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






12. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






13. 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






14. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






15. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






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






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






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






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






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






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






23. 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






24. Both players have dominant strategies and play them






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






26. Game in which one player makes a move after observing the other player's move






27. Revenue-Costs






28. Operates like the alleged Mafia. Region division of the market among the firms in the industry






29. 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"






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






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






32. 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.)






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






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






35. 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






36. 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






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






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






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






40. Produce identical products






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






42. 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






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






44. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






45. Takes Place inside the Mind of the consumer






46. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike






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






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






49. 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






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