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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. Identical or substitutable






2. 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






3. 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






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






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






6. 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






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






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






9. Involves price-fixing






10. Steel - autos - colas - airlines






11. The price that is low enough to deter entry






12. 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






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






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






15. 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






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






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






18. 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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19. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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






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






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






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






24. 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






25. 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






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






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






28. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






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






31. Price Sensitive






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






33. Single firm is sole producer of a product for which there are no close substitutes






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






35. 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






36. 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






37. A situation in which a change in price strategy by one firm affects sales and profits of another






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






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






40. 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






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






42. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






44. 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






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






46. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






48. 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






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






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