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






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






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






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






5. Single firm is sole producer of a product for which there are no close substitutes






6. 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






7. 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.)






8. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






9. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas

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






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






12. Rival who sets its output after the leader (Stackelberg's model)






13. 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






14. Simultaneous move game that is not repeated






15. Revenue-Costs






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






17. 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






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






19. 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






20. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






21. Price Sensitive






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






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






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






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






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






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






28. 1/(1+i)n






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






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






31. The derivative of total revenue






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






33. Face competition from companies that currently are not in the market but might enter






34. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






35. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling






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






37. 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






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






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






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






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






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






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






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






45. 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






46. Using advertising and other means to try to increase a firm's sales






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






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






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






50. Produce identical products







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