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






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






3. Identical or substitutable






4. 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.)






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






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






7. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






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






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






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






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






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






13. 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






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






15. 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






16. 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






17. 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






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






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






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






21. 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






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






23. 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






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






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






26. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






27. 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






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






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






30. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling






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






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






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






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






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






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






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






38. 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






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






40. Price Sensitive






41. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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






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






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






45. Involves price-fixing






46. 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






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






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






49. 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






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