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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. 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






2. 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






3. 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






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






5. 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






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






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






8. Toothpaste - shampoo - restaurants - banks






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






10. Involves price-fixing






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






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






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






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






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






16. 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






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






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






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






20. Both players have dominant strategies and play them






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






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






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






24. 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






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






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






27. 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






28. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






29. All firms and individuals willing and able to buy or sell a particular product






30. Actions taken by firms to plan for and react to competition from rival firms






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






32. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






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






34. 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






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






36. Produce identical products






37. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






38. 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.)






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






40. Single firm is sole producer of a product for which there are no close substitutes






41. 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






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






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






44. 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






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






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






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






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






49. Revenue-Costs






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