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






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






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






4. 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






5. Involves price-fixing






6. 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






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






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






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






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






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






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






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






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






15. 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






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






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






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






19. 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






20. Revenue-Costs






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






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






23. Variations on one good so that a firm can increase market sharea






24. 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






25. 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






26. The price that is low enough to deter entry






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






28. 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)






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






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






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






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






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






35. 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






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






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






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






39. Demand line is above ATC curve






40. When a manager makes a noncooperative decision






41. Steel - autos - colas - airlines






42. 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.)






43. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition






44. Long-run marginal cost curve above long-run average cost






45. Simultaneous move game that is not repeated






46. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies






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






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






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






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