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






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






3. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






4. Demand line is above ATC curve






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






6. 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






7. 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






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






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






10. Steel - autos - colas - airlines






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






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






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






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






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






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






17. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation






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






19. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player






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






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






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






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






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






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






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






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






28. 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






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






30. 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






31. 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






32. 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






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






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






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






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






37. 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






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






39. A combination of two or more companies into one company






40. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy






41. 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"






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






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






44. The exclusive right to a product for a period of 20 years from the date the product is invented






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






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






47. Revenue-Costs






48. When managers are able to charge each consumer their reservation price. Examples are car and home sales






49. Simultaneous move game that is not repeated






50. The price that is low enough to deter entry