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






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






3. Takes Place inside the Mind of the consumer






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






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






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






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






8. 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






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






10. 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






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






12. An oligopoly in which the firms produce a standardized product






13. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






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






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






17. Price Sensitive






18. Increases in the value of a product to each user - including existing users - as the total number of users rises






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






20. 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)






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






22. 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






23. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






24. 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






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






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






27. Game in which one player makes a move after observing the other player's move






28. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other






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






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






31. 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






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






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






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






35. 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)






36. The derivative of total revenue






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






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






39. The price that is low enough to deter entry






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






41. 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






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






43. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power






44. The practice of charging different prices to consumers for the same good or service






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






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






47. Revenue-Costs






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






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






50. 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)