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






2. Takes Place inside the Mind of the consumer






3. 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






4. 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)






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






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






7. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






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






9. 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






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






11. 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






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






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






14. Price Sensitive






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






16. The derivative of total revenue






17. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






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






20. The price that is low enough to deter entry






21. 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






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






23. Game in which each player makes decisions without knowledge of the other player's decisions






24. 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.)






25. If production of a good requires a particular input - then control of that input can be a barrier to entry






26. 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)






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






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






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






30. 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






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






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






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






34. Toothpaste - shampoo - restaurants - banks






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






36. 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






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






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






39. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






40. 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






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






42. Simultaneous move game that is not repeated






43. 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






44. Identical or substitutable






45. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






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






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






49. 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






50. A simpler way to operationalize first-degree price discrimination







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