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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. All firms and individuals willing and able to buy or sell a particular product






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






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






4. A combination of two or more companies into one company






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






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






7. 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






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






9. 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






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






11. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






12. Demand line is above ATC curve






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






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






15. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






16. Rules - strategies - payoffs - outcomes






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






18. 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






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






20. 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






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






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






23. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






24. 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






25. Price Sensitive






26. Involves price-fixing






27. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






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






29. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






30. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






31. Identical or substitutable






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






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






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






35. 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)






36. 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)






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






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






39. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it






40. The price that is low enough to deter entry






41. 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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42. 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






43. 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






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






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






46. Toothpaste - shampoo - restaurants - banks






47. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






48. Steel - autos - colas - airlines






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






50. 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