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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 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






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






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






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






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






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






7. The derivative of total revenue






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






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






10. 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






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






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






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






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






15. A situation in which neither firm has incentive to change its output given the other firm's output






16. Rules - strategies - payoffs - outcomes






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






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






19. Game in which one player makes a move after observing the other player's move






20. 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






21. 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






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






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






24. 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






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






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






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






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






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






30. 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






31. 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






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






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






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






35. 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.)






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






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






38. 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






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






40. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






42. Produce identical products






43. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






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






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






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






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






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






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