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






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






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






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. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






7. 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






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






9. 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






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






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






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






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






14. 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






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






16. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






18. 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






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






20. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






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






22. 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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23. A situation in which no one wants to change his or her behavior






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






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






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






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






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






29. 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






30. 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






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






32. In game theory - a game that is played again sometime after the previous game ends






33. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






34. Price Sensitive






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






36. Revenue-Costs






37. 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)






38. 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






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






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






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






42. Steel - autos - colas - airlines






43. 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






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






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






46. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






47. The price that is low enough to deter entry






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






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






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






Can you answer 50 questions in 15 minutes?



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