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






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






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






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






5. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product






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






7. 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






8. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"






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






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






11. Identical or substitutable






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






13. Price Sensitive






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






15. 1/(1+i)n






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






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






19. The price that is low enough to deter entry






20. 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






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






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






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






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






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






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






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






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






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






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






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






32. 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






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






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






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






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






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






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






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






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






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






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






43. In game theory - a decision rule that describes the actions a player will take at each decision point






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






45. When a manager makes a noncooperative decision






46. Toothpaste - shampoo - restaurants - banks






47. 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






48. 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)






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






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