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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. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers






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






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






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






5. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers






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






7. 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






8. 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






9. 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






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






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






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






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






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






15. The price that is low enough to deter entry






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






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






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






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






20. 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






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






22. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours






23. A strategy or action that always provides the best outcome no matter what decisions rivals make






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






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






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






27. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor






28. Takes Place inside the Mind of the consumer






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






30. 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)






31. Produce identical products






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






33. Rules - strategies - payoffs - outcomes






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






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






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






37. 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






38. 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






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






40. Using advertising and other means to try to increase a firm's sales






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






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






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






44. Involves price-fixing






45. 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






46. Toothpaste - shampoo - restaurants - banks






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






48. 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






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






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