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






2. 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






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






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






5. In game theory - benefit obtained by party that moves first in a sequential game






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






7. 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






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






9. The price that is low enough to deter entry






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






11. In game theory - a game that is played again sometime after the previous game ends






12. Produce identical products






13. 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






14. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies






15. The competition that domestic firms encounter from the products and services of foreign producers






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






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






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






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






21. 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






22. 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






23. A game that is played over and over again forever and in which players receive payoffs during each play of the game






24. 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






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






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






27. 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






28. 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






29. A product's ability to satisfy a large number of consumers at the same time






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






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






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






33. 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






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






35. Involves price-fixing






36. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






37. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans






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






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






40. Toothpaste - shampoo - restaurants - banks






41. 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






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






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






44. Demand line is above ATC curve






45. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






46. 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






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






48. The derivative of total revenue






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






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