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. 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






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






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






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






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






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






7. 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






8. Identical or substitutable






9. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






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






11. Single firm is sole producer of a product for which there are no close substitutes






12. The derivative of total revenue






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






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






15. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






16. Involves price-fixing






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






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






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






20. A situation in which neither firm has incentive to change its output given the other firm's output






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






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






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






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






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






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






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






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






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






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






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






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






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






34. 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






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






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






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






38. Steel - autos - colas - airlines






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






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






41. Takes Place inside the Mind of the consumer






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






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






44. The price that is low enough to deter entry






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






46. 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






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






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






49. 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






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