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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. The derivative of total revenue






2. 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






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






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






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






6. Price Sensitive






7. Steel - autos - colas - airlines






8. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






9. The competition that domestic firms encounter from the products and services of foreign producers






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






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






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






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






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






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






16. A game that is played over and over again forever and in which players receive payoffs during each play of the game






17. 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






18. The smallest quantity at which the average cost curve reaches its minimum






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






20. 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






21. Specific assets - Economies of scale - Excess capacity - Reputation effects






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






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






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






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






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






28. 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






29. 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






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






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






32. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






34. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






35. 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






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






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






38. 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






39. Both players have dominant strategies and play them






40. Demand line is above ATC curve






41. 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)






42. 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






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






44. Game in which one player makes a move after observing the other player's move






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






46. 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






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






48. Involves price-fixing






49. Simultaneous move game that is not repeated






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