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






2. 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






3. 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






4. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






6. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






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






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






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






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






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






12. 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






13. Price Sensitive






14. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






15. Both players have dominant strategies and play them






16. In game theory - a decision rule that describes the actions a player will take at each decision point






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






18. Ignoring the effects of their actions on each others' profits






19. 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






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






21. Maximize economic profit by producing the quantity at which MC=MR






22. 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






23. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






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






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






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






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






28. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






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






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






31. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition






32. 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






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






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






35. Steel - autos - colas - airlines






36. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






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






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






39. When a manager makes a noncooperative decision






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






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






42. 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.)






43. 1/(1+i)n






44. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






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






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






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






48. 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






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






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