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. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






2. A simpler way to operationalize first-degree price discrimination






3. Takes Place inside the Mind of the consumer






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






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






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






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






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






9. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






11. 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






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






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






14. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






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






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






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






18. 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)






19. 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






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






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






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






23. 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






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






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






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






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






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






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






30. Identical or substitutable






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






32. 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






33. Toothpaste - shampoo - restaurants - banks






34. Marginal cost curve above average variable cost - P* = SRMC






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






36. 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






37. 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






38. Revenue-Costs






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






40. Produce identical products






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






42. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies






43. 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






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






45. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product






46. Price Sensitive






47. 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






48. 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






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






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