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






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






3. A situation in which no one wants to change his or her behavior






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






5. Steel - autos - colas - airlines






6. 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






7. 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)






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






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






10. Simultaneous move game that is not repeated






11. 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






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






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






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






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






16. A product's ability to satisfy a large number of consumers at the same time






17. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals






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






19. 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






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






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






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






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






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






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






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






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






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






30. 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






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






32. 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






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






34. Price Sensitive






35. 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






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






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






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






39. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it






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






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






42. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them






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






44. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly






45. 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)






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






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






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






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






50. Maximize economic profit by producing the quantity at which MC=MR