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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. 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.)






2. An oligopoly in which the firms produce a standardized product






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






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






5. Simultaneous move game that is not repeated






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






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






8. Steel - autos - colas - airlines






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






10. 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






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






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






13. Identical or substitutable






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






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






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






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






18. 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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19. 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






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






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






22. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor






23. 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






24. 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






25. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






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






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






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






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






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






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






32. 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






33. Toothpaste - shampoo - restaurants - banks






34. 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






35. A simpler way to operationalize first-degree price discrimination






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






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






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






39. 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






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






41. 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






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






43. The derivative of total revenue






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






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






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






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






48. 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






49. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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







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