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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. An oligopoly in which the firms produce a standardized product






2. 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






3. 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)






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






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






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






7. 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






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






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






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






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






12. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






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






14. 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






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






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






17. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






19. Toothpaste - shampoo - restaurants - banks






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






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






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






23. Revenue-Costs






24. 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)






25. The price that is low enough to deter entry






26. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears






27. 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






28. 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






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. The physical characteristics of the market within which firms interact






31. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






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






33. 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






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






35. A product's ability to satisfy a large number of consumers at the same time






36. Demand line is above ATC curve






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






38. The derivative of total revenue






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






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






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






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






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






44. 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






45. 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






46. 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






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






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






49. 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






50. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade