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






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






4. 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






5. Demand line is above ATC curve






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






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






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






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






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






11. 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






12. 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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13. 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






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






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






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






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






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






19. 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)






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






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






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






23. 1/(1+i)n






24. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits






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






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






27. 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






28. 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.)






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






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






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






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






33. The price that is low enough to deter entry






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






35. 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"






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






37. When a manager makes a noncooperative decision






38. Involves price-fixing






39. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






44. The competition for sales between the products of one industry and the products of another industry






45. 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






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






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






48. A situation in which a change in price strategy by one firm affects sales and profits of another






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






50. 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