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. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry






2. Revenue-Costs






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






4. Price Sensitive






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






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






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






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






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






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






11. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






12. A situation in which a change in price strategy by one firm affects sales and profits of another






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






14. 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.)






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






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






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






18. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products






19. 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






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






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






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






23. Steel - autos - colas - airlines






24. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination






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






26. 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






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






28. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






30. 1/(1+i)n






31. 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






32. 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






33. 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






34. Both players have dominant strategies and play them






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






36. A strategy that guarantees the highest payoff given the worst possible scenario






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






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






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






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






42. 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






43. 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






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






45. A combination of two or more companies into one company






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






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






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






49. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






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