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






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






3. The derivative of total revenue






4. Demand line is above ATC curve






5. 1/(1+i)n






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






7. Produce identical products






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






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






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






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






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






13. Steel - autos - colas - airlines






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






15. 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






16. Game in which each player makes decisions without knowledge of the other player's decisions






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






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






19. 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






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






21. Both players have dominant strategies and play them






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






23. 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






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






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






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






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






28. Revenue-Costs






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






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






32. 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






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






35. 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






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






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






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






39. 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.)






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






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






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






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






44. 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






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






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






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






48. 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






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






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







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