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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. 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






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






3. Simultaneous move game that is not repeated






4. 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"






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






6. Rules - strategies - payoffs - outcomes






7. 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






8. 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






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






10. 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






11. In game theory - a game that is played again sometime after the previous game ends






12. 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






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






14. The practice of charging different prices to consumers for the same good or service






15. 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






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






17. 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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18. 1/(1+i)n






19. 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






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






21. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






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






23. 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






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






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






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






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






28. 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






29. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






34. A strategy or action that always provides the best outcome no matter what decisions rivals make






35. 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






36. Steel - autos - colas - airlines






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






38. 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






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






40. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






41. 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)






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






43. Both players have dominant strategies and play them






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






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






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






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






48. 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






49. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






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