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






2. 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)






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






4. 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.)






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






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






7. 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






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






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






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






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






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






13. Identical or substitutable






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






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






16. Simultaneous move game that is not repeated






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






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






19. Game in which each player makes decisions without knowledge of the other player's decisions






20. Demand line is above ATC curve






21. 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






22. The derivative of total revenue






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






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






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






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






27. 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






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






30. 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






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






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






33. 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






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






35. 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






36. Produce identical products






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






38. Involves price-fixing






39. 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






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






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






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






43. 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






44. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






45. When a manager makes a noncooperative decision






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






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






48. 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"






49. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






50. In game theory - game where parties make their moves in turn - one party making the first move followed by the other