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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 establishment firm commits to setting price below the profit-maximizing level to prevent entry






2. 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






3. 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






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






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






6. Steel - autos - colas - airlines






7. 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






8. When a manager makes a noncooperative decision






9. Produce identical products






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






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






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






13. 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






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






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






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






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






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






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. Involves price-fixing






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






23. 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






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






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






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






27. Takes Place inside the Mind of the consumer






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






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






30. First firm to set its output (Stackelberg's model)






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






32. Simultaneous move game that is not repeated






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






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






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






36. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






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






39. 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






40. 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






41. 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






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






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






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






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






46. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






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






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






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






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







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