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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. Takes Place inside the Mind of the consumer






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






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






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






5. 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






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






7. Produce identical products






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






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






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






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






13. 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






14. An oligopoly in which the firms produce a standardized product






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






16. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






17. In game theory - a decision rule that describes the actions a player will take at each decision point






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






19. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






20. 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






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






22. 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






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






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






25. Keeps the price just where it is to maximize profit






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






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






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






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






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






31. Steel - autos - colas - airlines






32. Revenue-Costs






33. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






34. 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






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






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






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






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






39. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






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






41. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






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






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






44. The price that is low enough to deter entry






45. 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.)






46. When a manager makes a noncooperative decision






47. 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"






48. 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






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






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