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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 - a game that is played again sometime after the previous game ends






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






3. A combination of two or more companies into one company






4. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them






5. Revenue-Costs






6. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking






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. 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. Both players have dominant strategies and play them






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






11. 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.)






12. Cooperation among firms that does not involve an explicit agreement






13. 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






14. The derivative of total revenue






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






16. 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






17. 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






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






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






20. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production






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






22. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable






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






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






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






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






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






28. Operates like the alleged Mafia. Region division of the market among the firms in the industry






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






30. 1/(1+i)n






31. When managers are able to charge each consumer their reservation price. Examples are car and home sales






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






33. 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






34. An establishment firm commits to setting price below the profit-maximizing level to prevent entry






35. Involves price-fixing






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






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






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






39. The smallest quantity at which the average cost curve reaches its minimum






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






41. Demand line is above ATC curve






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






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






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






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






47. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts






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






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






50. Steel - autos - colas - airlines







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