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






2. Produce identical products






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






4. 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






5. 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






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






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






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






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






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






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






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






14. 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






15. 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)






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






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






18. Revenue-Costs






19. Both players have dominant strategies and play them






20. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






21. Rules - strategies - payoffs - outcomes






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






23. Involves price-fixing






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






25. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark






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






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






28. 1/(1+i)n






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






30. Maximize economic profit by producing the quantity at which MC=MR






31. 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






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






33. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






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






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






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






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






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






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






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






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






42. Takes Place inside the Mind of the consumer






43. Game in which each player makes decisions without knowledge of the other player's decisions






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






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






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






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






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






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






50. 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