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Business Competition
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Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
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study here
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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. 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
Examples of Oligopoly
Tacit collusion
Trigger strategy
Mutual Interdependence
2. The practice of charging different prices to consumers for the same good or service
Price discrimination
Implicit Collusion
Monopolistic Competition
Competitive market
3. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Cross-subsidy pricing
Vertical Merger
Rothschild index
Import competition
4. The competition that domestic firms encounter from the products and services of foreign producers
Merger
Transfer pricing
Rothschild index
Import competition
5. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Sweezy oligopoly
Barrier to entry
Joint Venture
Tacit collusion
6. An oligopoly in which the firms produce a differentiated product
Non-cooperative behavior
Differentiated oligopoly
Rent-seeking behavior
Covert Collusion
7. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Inefficiency
Normal-form game
Horizontal Merger/Integration
Non-rivalrous consumption
8. The practice of bundling several different products together and selling them at a single "bundle" price
Sequential game
Reservation Price
Interdependence
Commodity bundling
9. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Market
Unbalanced Oligopoly
Peak-load pricing
Monopolistic Competition
10. A product's ability to satisfy a large number of consumers at the same time
Market Structure
Mixed (randomized) strategy
Simultaneous consumption
Nonprime competition
11. A situation in which a change in price strategy by one firm affects sales and profits of another
Mutual interdependence
Limit price
Kinked-demand curve
High Price Elasticity
12. 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
Contestable market
Credible threat
Monopolistic Characteristics:
Market Structure
13. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Price war
Cheating
Interdependence
Concentration Ratio
14. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Finding profit for oligopoly games
Second-Degree Price Discrimination
Implicit Collusion
Product Differentiation
15. A combination of two or more companies into one company
Non-price competition
Merger
Cournot equilibrium
Examples of Monopolistic Competition
16. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Cooperation
Product differentiation
Contestable market
17. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Transfer pricing
Finding profit for oligopoly games
Barrier to entry
Import competition
18. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Four-firm concentration ratio
Vertical Merger
Simultaneous-move game
Horizontal Merger/Integration
19. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
No cooperative equilibrium
Finding profit for oligopoly games
Mutual interdependence
Monopoly (characteristics)
20. Actions taken by a firm to achieve a goal - such as maximizing profits
Dominant strategy equilibrium
Business strategy
Cournot oligopoly
Perfect Competition Long Run Supply
21. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Monopolistic Competition
Non-rivalrous consumption
Price Leadership
Credible threat
22. Involves price-fixing
Marginal Revenue
Natural Monopoly (local phone or electric company)
Equilibrium
Covert Collusion
23. If many firms can supply an input and the input is not specialized - the suppliers are unlikely to have the bargaining power to limit a firm's profits
What is game?
Cutthroat Competition
Bargaining Power of Suppliers
Strategy
24. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Non-cooperative behavior
Perfect Competition Long Run Supply
First-Degree Price Discrimination (Perfect)
Empty threat
25. 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)
Perfect Competition (characteristics)
Barrier to entry
Profit
Open Collusion
26. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Natural Monopoly (local phone or electric company)
Non-cooperative equilibrium
Concentration Ratio
Fair return price
27. Game in which each player makes decisions without knowledge of the other player's decisions
Disappearing invisible hand
Simultaneous-move game
Network effects
Monopoly (characteristics)
28. Produce identical products
Perfect Competitor Characteristics
Monopolistic Characteristics:
Competitive market
Lerner index
29. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Rent-seeking behavior
Second-Degree Price Discrimination
Normal-form game
Peak-load pricing
30. Maximize economic profit by producing the quantity at which MC=MR
Follower
Maximizing profit in Oligopoly games
Tit-for-tat strategy
Dominant strategy equilibrium
31. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Strategic behavior
Primary Sources of Monopolistic Power
Payoff matrix
Cutthroat Competition
32. 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
Payoff matrix
Perfect Competition Long Run Supply
Product differentiation
Two-part pricing
33. Demand line is above ATC curve
Sequential game
Competitive market
Strategy
Perfect Competitor Making a Profit
34. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Competitive market
Duopoly
Network effects
Perfect Competition (characteristics)
35. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Examples of Monopolistic Competition
Peak-load pricing
Network effects
Tit-for-tat strategy
36. Rules - strategies - payoffs - outcomes
The Threat from Potential Entrants Firms
Open Collusion
Strategic behavior
What is game?
37. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Vertical Merger
Imperfect competition
Perfect Competitor Making a Profit
Present Value (PV)
38. First firm to set its output (Stackelberg's model)
Open Collusion
Market Structure
Leader
Double marginalization
39. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Natural Monopoly (local phone or electric company)
Concentration Ratio
Marginal Revenue
Sequential game
40. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Normal-form game
Rent-seeking behavior
Primary Sources of Monopolistic Power
Third-Degree Price Discrimination
41. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Common knowledge
Indefinitely repeated game
Fair return price
Contestable market
42. Single firm is sole producer of a product for which there are no close substitutes
Pure monopoly
Mutual Interdependence
Reservation Price
Bargaining Power of Suppliers
43. Cooperation among firms that does not involve an explicit agreement
Tacit collusion
Pure monopoly
Simultaneous decision games
Network effects
44. 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
Differentiated oligopoly
Cournot equilibrium
Patent
Socially optimal price
45. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Price matching
Contestable market
Stackelberg oligopoly
Monopolistic Characteristics:
46. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Two-part Tariff Method of Pricing
Import competition
Payoff table
47. Price Sensitive
Randomized pricing
Simultaneous-move game
High Price Elasticity
Price discrimination
48. When the decisions of two or more firms significantly affect each others' profits
Implicit Collusion
Strategic behavior
Interdependence
Normal-form game
49. Face competition from companies that currently are not in the market but might enter
Kinked-demand curve
The Threat from Potential Entrants Firms
Collusion
Price war
50. All firms and individuals willing and able to buy or sell a particular product
Patent
Peak-load pricing
Oligopoly
Market
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