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






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






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






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






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. 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






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






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






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






11. 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






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






13. 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






14. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






16. 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"






17. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






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






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






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






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






22. The practice of bundling several different products together and selling them at a single "bundle" price






23. 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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24. 1/(1+i)n






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






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






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






28. 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






29. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






30. 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






31. 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






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






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






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






35. Rules - strategies - payoffs - outcomes






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






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






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






39. Takes Place inside the Mind of the consumer






40. Toothpaste - shampoo - restaurants - banks






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






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






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






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






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






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






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






48. Produce identical products






49. 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






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