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






2. 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


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






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






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






6. 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






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






8. 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






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






10. Rules - strategies - payoffs - outcomes






11. 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






12. 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"






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






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






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






16. 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)






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






18. 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.)






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






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






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






22. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






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






24. Game in which one player makes a move after observing the other player's move






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






26. Takes Place inside the Mind of the consumer






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






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






29. 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






30. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






32. The derivative of total revenue






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






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






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






36. 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






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






38. 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






39. 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






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






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






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






43. If production of a good requires a particular input - then control of that input can be a barrier to entry






44. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






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






46. Revenue-Costs






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






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






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






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