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






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






3. 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






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






5. Demand line is above ATC curve






6. Identical or substitutable






7. 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






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






9. Both players have dominant strategies and play them






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






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






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






13. 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






14. 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






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






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






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






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






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






20. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






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






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






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






24. Face competition from companies that currently are not in the market but might enter






25. The price that is low enough to deter entry






26. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






27. 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






28. The practice of bundling several different products together and selling them at a single "bundle" price






29. 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






30. 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.)






31. Variations on one good so that a firm can increase market sharea






32. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






34. 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






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






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






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






38. 1/(1+i)n






39. 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






40. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






41. 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






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






43. 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






44. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






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






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






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






48. Rules - strategies - payoffs - outcomes






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






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