Test your basic knowledge |

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. Revenue-Costs






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






3. 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)






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






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






6. 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






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






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






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






10. 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






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






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






13. 1/(1+i)n






14. 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






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






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






17. Produce identical products






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






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






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






21. 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






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






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






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






25. 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






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






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






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






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






30. Using advertising and other means to try to increase a firm's sales






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






32. 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






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






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






35. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears






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






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






38. Rival who sets its output after the leader (Stackelberg's model)






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






40. Demand line is above ATC curve






41. 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






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






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






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






45. Both players have dominant strategies and play them






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






47. Involves price-fixing






48. 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






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






50. When a manager makes a noncooperative decision