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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. 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






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






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






4. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level






5. Toothpaste - shampoo - restaurants - banks






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






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






8. 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






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






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






11. 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)






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






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






14. 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"






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






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






17. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






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






19. 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






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






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






22. 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






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






24. Both players have dominant strategies and play them






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






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






27. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






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






29. Marginal cost curve above average variable cost - P* = SRMC






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






31. 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






32. Steel - autos - colas - airlines






33. Price Sensitive






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






35. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist






36. 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






37. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)






38. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






40. 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






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






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






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






44. 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






45. Rules - strategies - payoffs - outcomes






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






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






48. 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






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






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