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






2. 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.)






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






4. 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






5. Rules - strategies - payoffs - outcomes






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






7. 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






8. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






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






11. Revenue-Costs






12. First firm to set its output (Stackelberg's model)






13. 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






14. The competition for sales between the products of one industry and the products of another industry






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






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






18. 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






19. An oligopoly in which the firms produce a standardized product






20. 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






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






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






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






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






25. 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






26. 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






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






28. 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






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






30. The derivative of total revenue






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






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






33. Both players have dominant strategies and play them






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






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






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






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






38. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






41. Involves price-fixing






42. 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






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






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






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






47. 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






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






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






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