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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. Produce identical products






2. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






4. 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


5. 1/(1+i)n






6. 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






7. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






8. 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






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






10. 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


11. 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






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






13. 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






14. When a manager makes a noncooperative decision






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






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






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






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






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






20. 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






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






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






23. 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






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






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






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






27. Cooperation among firms that does not involve an explicit agreement






28. 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






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






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






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






32. Demand line is above ATC curve






33. 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






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






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






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. Rules - strategies - payoffs - outcomes






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






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






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






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






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






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






44. 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






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






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






47. Both players have dominant strategies and play them






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






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






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