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






2. 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






3. Rules - strategies - payoffs - outcomes






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






5. Takes Place inside the Mind of the consumer






6. 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






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






8. Demand line is above ATC curve






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






10. If production of a good requires a particular input - then control of that input can be a barrier to entry






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






12. Simultaneous move game that is not repeated






13. A game that is played over and over again forever and in which players receive payoffs during each play of the game






14. Actions taken by a firm to achieve a goal - such as maximizing profits






15. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






16. 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






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






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






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






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






21. The situation when a firm's long-run average costs fall as it increases output






22. The price that is low enough to deter entry






23. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services






24. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase






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






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






27. 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






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






29. 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






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






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






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






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






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






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






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






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






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






39. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






40. 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






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






42. The derivative of total revenue






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






44. When a manager makes a noncooperative decision






45. 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)






46. Identical or substitutable






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






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






49. 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






50. Rival who sets its output after the leader (Stackelberg's model)