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






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






3. 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






4. The price that is low enough to deter entry






5. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






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






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






8. 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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9. 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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10. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






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






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






13. When a manager makes a noncooperative decision






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






15. 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






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






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






18. 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






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






20. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






21. Game in which each player makes decisions without knowledge of the other player's decisions






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






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






24. A situation in which neither firm has incentive to change its output given the other firm's output






25. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






26. 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






27. 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






28. 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






29. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






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






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






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






33. 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






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






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






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






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






38. 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






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






40. Price Sensitive






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






42. Revenue-Costs






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






44. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






46. 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






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






48. 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






49. Takes Place inside the Mind of the consumer






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