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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 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






2. A situation in which neither firm has incentive to change its output given the other firm's output






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






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






5. Toothpaste - shampoo - restaurants - banks






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






7. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






11. 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


12. 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






13. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company






14. Rules - strategies - payoffs - outcomes






15. 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






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






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






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






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






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






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






22. 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






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






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






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






26. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly






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






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






29. 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






30. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games






31. A situation in which a change in price strategy by one firm affects sales and profits of another






32. Demand line is above ATC curve






33. 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)






34. 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






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






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






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






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






39. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends






40. 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






41. 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






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






43. The derivative of total revenue






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






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






46. 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






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






48. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






49. Both players have dominant strategies and play them






50. First firm to set its output (Stackelberg's model)