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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. A situation in which neither firm has incentive to change its output given the other firm's output






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






3. The derivative of total revenue






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






5. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






6. 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






7. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






8. Toothpaste - shampoo - restaurants - banks






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






10. 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






11. 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






12. 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






13. 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






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






15. Variations on one good so that a firm can increase market sharea






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






17. Identical or substitutable






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






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






20. 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






21. 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)






22. 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






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






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






25. When a manager makes a noncooperative decision






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






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






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






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






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






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






32. 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






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






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






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






36. 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






37. 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






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






39. 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






40. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






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






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






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






44. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)






45. Produce identical products






46. The price that is low enough to deter entry






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






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






49. The practice of bundling several different products together and selling them at a single "bundle" price






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