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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. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it






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






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






4. 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






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






6. 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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7. Produce identical products






8. The price that is low enough to deter entry






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






10. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






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






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






13. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






14. 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






15. Revenue-Costs






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






17. Takes Place inside the Mind of the consumer






18. 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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19. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






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






21. The derivative of total revenue






22. 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






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






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






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






26. 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






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






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






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






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






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






32. Involves price-fixing






33. 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






34. 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.)






35. In game theory - a decision rule that describes the actions a player will take at each decision point






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






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






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






39. Price Sensitive






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






41. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






42. 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






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






44. 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






45. 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






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






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






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






49. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






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