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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. 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






2. The price that is low enough to deter entry






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






4. Simultaneous move game that is not repeated






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






6. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






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






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






9. 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






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






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






12. A firm whose price decisions are tacitly accepted and followed by others in the industry






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






14. Takes Place inside the Mind of the consumer






15. 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)






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






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






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






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






20. 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






21. 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






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






23. 1/(1+i)n






24. 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.)






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






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






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






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






29. 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)






30. 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"






31. Involves price-fixing






32. Both players have dominant strategies and play them






33. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






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






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






36. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






37. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






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






39. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






40. 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






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






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






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






44. When the decisions of two or more firms significantly affect each others' profits






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






46. 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






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






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






49. Demand line is above ATC curve






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