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






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






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






4. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






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






7. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






8. 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






9. 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






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






11. 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)






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






13. When a manager makes a noncooperative decision






14. Both players have dominant strategies and play them






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






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






17. 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






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






19. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)






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






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






22. 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






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






24. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






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






26. Involves price-fixing






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






28. 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






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






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






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






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






33. 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


34. Revenue-Costs






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






36. 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






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






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






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






40. Steel - autos - colas - airlines






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






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






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






44. 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






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






46. Rules - strategies - payoffs - outcomes






47. 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






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






49. 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






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