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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 competition for sales between the products of one industry and the products of another industry






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






3. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






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






6. 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






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






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






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






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






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






12. Toothpaste - shampoo - restaurants - banks






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






14. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






16. Produce identical products






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






18. 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






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






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






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






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






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






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






26. Both players have dominant strategies and play them






27. 1/(1+i)n






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






29. Steel - autos - colas - airlines






30. 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






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






32. Price Sensitive






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






34. Simultaneous move game that is not repeated






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






36. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense






37. An oligopoly in which the firms produce a differentiated product






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






39. Ignoring the effects of their actions on each others' profits






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






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






42. Demand line is above ATC curve






43. 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)






44. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi






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






46. 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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47. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs






48. 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






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






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