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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 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






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






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






4. 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






5. 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






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






7. 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






8. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






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






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






11. Price Sensitive






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






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






14. Takes Place inside the Mind of the consumer






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






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






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






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






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






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






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






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






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






24. 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






25. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






26. 1/(1+i)n






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






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






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






30. Steel - autos - colas - airlines






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






32. 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"






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






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






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






36. 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






37. When the decisions of two or more firms significantly affect each others' profits






38. 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






39. 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






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






41. The derivative of total revenue






42. The price that is low enough to deter entry






43. 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






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






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






46. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry






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






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






49. 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






50. The exclusive right to a product for a period of 20 years from the date the product is invented