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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. Toothpaste - shampoo - restaurants - banks






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






3. Revenue-Costs






4. 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






5. The derivative of total revenue






6. 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






7. 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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8. 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






9. A game that is played over and over again forever and in which players receive payoffs during each play of the game






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






11. All firms and individuals willing and able to buy or sell a particular product






12. 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

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13. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






15. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






17. 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






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






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






21. 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






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






23. Simultaneous move game that is not repeated






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






25. The price that is low enough to deter entry






26. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






27. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






28. Demand line is above ATC curve






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






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






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






32. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






33. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






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






35. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount






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






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






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






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






40. When a manager makes a noncooperative decision






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






42. An equilibrium in a game in which players cooperate to increase their mutual payoff






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






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






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






47. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






48. 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






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






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