Test your basic knowledge |

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






2. 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

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3. 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"






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






5. Demand line is above ATC curve






6. 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






7. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






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






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






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






11. 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






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






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






14. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






15. Steel - autos - colas - airlines






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






17. Rules - strategies - payoffs - outcomes






18. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






19. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






20. Price Sensitive






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






22. Revenue-Costs






23. The derivative of total revenue






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






25. When a manager makes a noncooperative decision






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






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






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






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






30. Identical or substitutable






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






32. 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






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






34. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






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






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






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






39. 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






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






41. 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






42. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






44. The practice of bundling several different products together and selling them at a single "bundle" price






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






46. A combination of two or more companies into one company






47. 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)






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






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






50. 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