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






2. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power






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






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






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






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






7. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






8. Produce identical products






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






10. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






11. Actions taken by a firm to achieve a goal - such as maximizing profits






12. Takes Place inside the Mind of the consumer






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






14. Price Sensitive






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






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






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






18. 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






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






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






21. An oligopoly in which the firms produce a differentiated product






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






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






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






25. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






27. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






28. The derivative of total revenue






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






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






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






32. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






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






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






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






37. 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






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






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






40. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






41. 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






42. 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.)






43. 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






44. 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






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






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






47. 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






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






49. A situation in which no one wants to change his or her behavior






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