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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. 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

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






3. 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






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






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






6. 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






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. The price that is low enough to deter entry






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






10. Rules - strategies - payoffs - outcomes






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






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






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






14. 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






15. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations






16. An equilibrium in a game in which players cooperate to increase their mutual payoff






17. Cooperation among firms that does not involve an explicit agreement






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






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






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






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






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






23. Price Sensitive






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






25. 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






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






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






28. An equilibrium in a game in which players do not cooperate but pursue their own self-interest






29. The competition that domestic firms encounter from the products and services of foreign producers






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






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






32. 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






33. 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






34. The reward received by a player in a game - such as the profit earned by an oligopolist






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






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






37. Demand line is above ATC curve






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






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






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






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






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






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






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






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






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






47. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w






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






49. Revenue-Costs






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