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






2. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






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






4. Both players have dominant strategies and play them






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






6. 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






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






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






9. An oligopoly in which the firms produce a differentiated product






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






11. 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






12. 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






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






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






15. 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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16. Takes Place inside the Mind of the consumer






17. 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






18. Increases in the value of a product to each user - including existing users - as the total number of users rises






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






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






21. Produce identical products






22. 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)






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






24. 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






25. 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






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






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






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






29. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






30. 1/(1+i)n






31. 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






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






33. 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






34. A situation in which a change in price strategy by one firm affects sales and profits of another






35. Price Sensitive






36. 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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37. Involves price-fixing






38. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






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






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






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






42. Rules - strategies - payoffs - outcomes






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






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






45. 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






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






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






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






49. 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






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







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