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






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






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






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






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






6. 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






7. 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






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






10. 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






11. The price that is low enough to deter entry






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






13. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement






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






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






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






17. Takes Place inside the Mind of the consumer






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






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






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






21. The derivative of total revenue






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






23. 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.)






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






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






26. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






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






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






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






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






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






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






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






36. Involves price-fixing






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






38. 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






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






40. 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






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






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






43. Toothpaste - shampoo - restaurants - banks






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






45. A situation in which a change in price strategy by one firm affects sales and profits of another






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






47. Demand line is above ATC curve






48. A situation in which no one wants to change his or her behavior






49. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division






50. 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