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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. A strategy that guarantees the highest payoff given the worst possible scenario






2. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market






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






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






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






6. 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






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






8. 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






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






10. Simultaneous move game that is not repeated






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






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






13. 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






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






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






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






17. 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






18. 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.)






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






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






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






22. 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






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






24. 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"






25. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






27. The price that is low enough to deter entry






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






29. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies






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






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






32. 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)






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. Price Sensitive






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






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






37. 1/(1+i)n






38. 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






39. 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






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






41. 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






42. 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






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






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






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






46. Steel - autos - colas - airlines






47. When a manager makes a noncooperative decision






48. Demand line is above ATC curve






49. 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






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







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