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






2. 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






3. Rules - strategies - payoffs - outcomes






4. Revenue-Costs






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






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






7. 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






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






9. 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






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






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






12. Involves price-fixing






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






14. 1/(1+i)n






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






16. 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






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






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






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






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






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






22. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






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






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






25. 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






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






27. 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






28. 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






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






30. 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)






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






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






33. 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






34. Both players have dominant strategies and play them






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






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






37. A situation in which neither firm has incentive to change its output given the other firm's output






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






39. 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






40. 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






41. 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






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






43. When a manager makes a noncooperative decision






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






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






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






47. Steel - autos - colas - airlines






48. The smallest quantity at which the average cost curve reaches its minimum






49. 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






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