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. 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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2. 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






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






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






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






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






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






8. The physical characteristics of the market within which firms interact






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






10. When a manager makes a noncooperative decision






11. Long-run marginal cost curve above long-run average cost






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






13. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor






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






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






16. Involves price-fixing






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






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






19. 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






20. 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






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






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






23. Both players have dominant strategies and play them






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






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






27. In game theory - game where parties make their moves in turn - one party making the first move followed by the other






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






29. Price Sensitive






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






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






32. Rules - strategies - payoffs - outcomes






33. 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






34. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






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






36. Revenue-Costs






37. 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






38. 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






39. Produce identical products






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






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






42. Simultaneous move game that is not repeated






43. 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






44. 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






45. Identical or substitutable






46. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






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






48. The situation when a firm's long-run average costs fall as it increases output






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






50. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production