Test your basic knowledge |

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. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






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






4. 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






5. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






6. 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






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






8. 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






9. Takes Place inside the Mind of the consumer






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






12. Simultaneous move game that is not repeated






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






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






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






16. The derivative of total revenue






17. 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






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






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






20. Price Sensitive






21. An equilibrium in a game in which players cooperate to increase their mutual payoff






22. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






23. 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






24. 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






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






26. 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






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






28. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar






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






30. 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






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






33. Demand line is above ATC curve






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






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






36. 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






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






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






39. In game theory - benefit obtained by party that moves first in a sequential game






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






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






42. A table that shows the payoffs for every possible action by each player for every possible action by the other player






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






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






45. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






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






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






48. 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.)






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






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