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






2. Both players have dominant strategies and play them






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






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






5. 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






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






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






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






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






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






11. 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






12. 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






13. Demand line is above ATC curve






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






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






16. 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






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






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






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






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






21. 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






22. 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"






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






24. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






25. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium






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






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






28. A simpler way to operationalize first-degree price discrimination






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






30. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






31. Simultaneous move game that is not repeated






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






33. Actions taken by a firm to achieve a goal - such as maximizing profits






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






35. 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






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






37. Takes Place inside the Mind of the consumer






38. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






39. 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






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






41. 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






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






43. 1/(1+i)n






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






45. 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






46. Toothpaste - shampoo - restaurants - banks






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






48. Identical or substitutable






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






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







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