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. Involves price-fixing






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






3. 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






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






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






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






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






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






9. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






11. Revenue-Costs






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






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






14. 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






15. 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)






16. The derivative of total revenue






17. 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.)






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






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






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






21. 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






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






23. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






24. 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






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






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






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






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






29. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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30. 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






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






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






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






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






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






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






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






38. Steel - autos - colas - airlines






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






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






41. The price that is low enough to deter entry






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






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






44. 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






45. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking






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






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






48. Both players have dominant strategies and play them






49. 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






50. 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