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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 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






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






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






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






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






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






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






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






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






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






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






12. 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






13. 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






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






15. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef






16. The derivative of total revenue






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






18. 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






19. 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"






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






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






22. 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






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






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






25. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






26. 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






27. 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






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






29. 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






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






31. 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






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






33. 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






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






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






36. Actions taken by a firm to achieve a goal - such as maximizing profits






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






38. 1/(1+i)n






39. 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






40. 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






41. A combination of two or more companies into one company






42. Identical or substitutable






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






44. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






45. Toothpaste - shampoo - restaurants - banks






46. Revenue-Costs






47. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry






48. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies






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






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






Can you answer 50 questions in 15 minutes?



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