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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 combination of two or more companies into one company






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






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






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






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






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






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






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






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






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






11. When a manager makes a noncooperative decision






12. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends






13. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






14. 1/(1+i)n






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






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






17. Takes Place inside the Mind of the consumer






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






19. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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






21. 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






22. 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






23. Rules - strategies - payoffs - outcomes






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






25. Simultaneous move game that is not repeated






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






27. 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






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






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






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






31. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits






32. Both players have dominant strategies and play them






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






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






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






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






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






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






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






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






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






43. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






45. 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






46. 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






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






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






49. 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






50. 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