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






2. 1/(1+i)n






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






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






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






6. 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






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






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






9. Toothpaste - shampoo - restaurants - banks






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






11. Takes Place inside the Mind of the consumer






12. 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






13. 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






14. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






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






16. 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






17. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level






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






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






20. 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






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






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






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






24. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






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






26. 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






27. Simultaneous move game that is not repeated






28. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






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






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






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






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






35. Identical or substitutable






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






37. The price that is low enough to deter entry






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






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






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






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






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






43. 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






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






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






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






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






48. Steel - autos - colas - airlines






49. 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






50. 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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