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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. 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






2. 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






3. 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






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






5. 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






6. 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)






7. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






8. Identical or substitutable






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






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






11. Price Sensitive






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






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






14. 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






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






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






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






18. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2






19. Demand line is above ATC curve






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






21. Steel - autos - colas - airlines






22. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor






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






24. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






25. 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






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






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






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






29. 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






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






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






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






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






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






35. Toothpaste - shampoo - restaurants - banks






36. Simultaneous move game that is not repeated






37. 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






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






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






40. 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






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






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






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






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






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






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






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






48. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike






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






50. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them