Test your basic knowledge |

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






3. An oligopoly in which the firms produce a standardized product






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






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






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






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






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






9. 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






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






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. 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






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






14. The derivative of total revenue






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






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






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






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






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






21. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)






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






24. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way






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






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






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






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






29. Rules - strategies - payoffs - outcomes






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






31. Simultaneous move game that is not repeated






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






33. 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)






34. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m






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






36. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased






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






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






39. Maximize economic profit by producing the quantity at which MC=MR






40. Involves price-fixing






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






42. 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"






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






44. Keeps the price just where it is to maximize profit






45. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept






46. 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






47. Produce identical products






48. An equilibrium in a game in which players cooperate to increase their mutual payoff






49. Identical or substitutable






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