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






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






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






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






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






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






7. 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






8. Price Sensitive






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






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






11. 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)






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






13. 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






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






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






16. 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






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






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






19. Actions taken by firms to plan for and react to competition from rival firms






20. Steel - autos - colas - airlines






21. A situation where one firm is able to provide a service at a lower cost than could several competing firms






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






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






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






25. Rules - strategies - payoffs - outcomes






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






27. Simultaneous move game that is not repeated






28. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals






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






30. 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






31. 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






32. Both players have dominant strategies and play them






33. A table that shows the payoffs that each firm earns from every combination of strategies by the firms






34. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so

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35. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power






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






37. Demand line is above ATC curve






38. 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






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






40. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase






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






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






43. 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






44. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action






45. The situation when a firm's long-run average costs fall as it increases output






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






47. Produce identical products






48. Game in which one player makes a move after observing the other player's move






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






50. 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