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. 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






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






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






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






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






6. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






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






8. 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






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






10. Price Sensitive






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






12. Toothpaste - shampoo - restaurants - banks






13. 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






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






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






17. Produce identical products






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






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






20. Takes Place inside the Mind of the consumer






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






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






23. Involves price-fixing






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






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






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






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






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






29. 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






30. A situation in which no one wants to change his or her behavior






31. Demand line is above ATC curve






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






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






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






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






37. 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






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






39. The price that is low enough to deter entry






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






41. 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






42. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table






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






44. 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






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






46. 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






47. 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






48. When a manager makes a noncooperative decision






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






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