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






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






3. Involves price-fixing






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






5. 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






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






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






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






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






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






11. Rules - strategies - payoffs - outcomes






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






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






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






15. Takes Place inside the Mind of the consumer






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






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






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






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






20. 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






21. 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)






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






23. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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






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






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






27. In game theory - a game that is played again sometime after the previous game ends






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






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






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






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






32. 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






33. 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






34. Toothpaste - shampoo - restaurants - banks






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






36. 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






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






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






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






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






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






42. 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






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






44. 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






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






46. 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






47. 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






48. The situation when a firm's long-run average costs fall as it increases output






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






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