SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
Business Competition
Start Test
Study First
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. Marginal cost curve above average variable cost - P* = SRMC
Unbalanced Oligopoly
Perfect Competition Short Run Supply
The Threat from Potential Entrants Firms
Herfindahl-Hirschman index (HHI)
2. The reward received by a player in a game - such as the profit earned by an oligopolist
Payoff
Cournot equilibrium
Bertrand oligopoly
Simultaneous-move game
3. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase
Covert Collusion
Merger
Block pricing
Perfect Competition Long Run Supply
4. 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
First-mover advantage
Nonprime competition
Common knowledge
Finding profit for oligopoly games
5. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Profit
Price war
Simultaneous consumption
Implicit Collusion
6. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
The Threat from Potential Entrants Firms
Network effects
Peak-load pricing
Profit
7. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
First-mover advantage
Two-part pricing
Inefficiency
Network effects
8. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
No cooperative equilibrium
Cooperation
The Threat from Potential Entrants Firms
Price Leadership
9. A combination of two or more companies into one company
Merger
Perfect Competition (characteristics)
Bertrand oligopoly
Mixed (randomized) strategy
10. The practice of charging different prices to consumers for the same good or service
Double marginalization
Price discrimination
Cooperative equilibrium
Perfect Competition (characteristics)
11. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies
Sequential game
Contestable market
Finding profit for oligopoly games
Extensive-form game
12. Revenue-Costs
Mutual Interdependence
Profit
Cross-subsidy pricing
Oligopoly
13. 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"
Kinked-demand curve
Credible threat
Reservation Price
Two-part pricing
14. 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
Vertical Merger
Non-cooperative equilibrium
Repeated game
Secure strategy
15. 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
Peak-load pricing
Price war
Cournot oligopoly
Examples of Oligopoly
16. The price that is low enough to deter entry
Two-part Tariff Method of Pricing
Limit price
Leader
Randomized pricing
17. 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
Natural Monopoly (local phone or electric company)
Repeated game
Monopolistic Competition
Cooperation
18. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Rent-seeking behavior
Third-Degree Price Discrimination
Product differentiation
Natural Monopoly (local phone or electric company)
19. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Secure strategy
Cooperation
Herfindahl-Hirschman index (HHI)
Second-Degree Price Discrimination
20. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Herfindahl-Hirschman index (HHI)
Indefinitely repeated game
Limit pricing
Unbalanced Oligopoly
21. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Examples of Oligopoly
Pure monopoly
Monopoly (characteristics)
Imperfect competition
22. 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)
Monopoly (characteristics)
Barrier to entry
Inter-industry competition
Monopolistic Competition
23. Demand line is above ATC curve
Randomized pricing
Perfect Competitor Making a Profit
Merger
Cournot oligopoly
24. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Normal-form game
Price matching
Open Collusion
Vertical Merger
25. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Cutthroat Competition
Secure strategy
Bargaining Power of Buyers
Randomized pricing
26. An oligopoly in which the firms produce a standardized product
Homogenous oligopoly
Market Structure
Third-Degree Price Discrimination
Lerner index
27. Long-run marginal cost curve above long-run average cost
Sequential game
Perfect Competition Long Run Supply
Joint Venture
Tacit collusion
28. Steel - autos - colas - airlines
Limit pricing
Monopolistic Characteristics:
Examples of Oligopoly
Patent
29. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Price war
Dansby-Willig performance index
Product differentiation
Cooperative equilibrium
30. The derivative of total revenue
Sequential game
Unbalanced Oligopoly
Implicit Collusion
Marginal Revenue
31. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Secure strategy
Mutual interdependence
Open Collusion
Commodity bundling
32. A strategy that is contingent on the past play of a game and ion which some particular past action "triggers" a different action by a player
Trigger strategy
Finding profit for oligopoly games
The Threat from Potential Entrants Firms
Undifferentiated
33. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Vertical Merger
Stackelberg oligopoly
Monopoly (characteristics)
Second-Degree Price Discrimination
34. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Contestable market
Non-rivalrous consumption
Marginal Revenue
Oligopoly
35. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef
Price discrimination
Rothschild index
Disappearing invisible hand
Prisoners' dilemma
36. First firm to set its output (Stackelberg's model)
Perfect Competition Long Run Supply
Ownership of a Key Input
Leader
Minimum efficient scale (full capacity)
37. A product's ability to satisfy a large number of consumers at the same time
Kinked-demand curve
Price matching
Simultaneous consumption
Marginal Revenue
38. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Price war
Non-cooperative equilibrium
Vertical Merger
Tacit collusion
39. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Price Leadership
Repeated game
Subgame perfect equilibrium
Imperfect competition
40. 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
Imperfect competition
Cutthroat Competition
Dominant strategy
Competitive market
41. An oligopoly in which the firms produce a differentiated product
Price war
Peak-load pricing
Differentiated oligopoly
Two-part pricing
42. All firms and individuals willing and able to buy or sell a particular product
Market
Natural Monopoly (local phone or electric company)
Marginal Revenue
Empty threat
43. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
The Threat from Potential Entrants Firms
Common knowledge
Homogenous oligopoly
Payoff
44. Both players have dominant strategies and play them
Dominant strategy equilibrium
Tacit collusion
Bargaining Power of Buyers
One-shot game
45. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Peak-load pricing
Double marginalization
Sequential game
Lerner index
46. Single firm is sole producer of a product for which there are no close substitutes
Barrier to entry
Pure monopoly
Mutual interdependence
Perfect Competition Long Run Supply
47. When the decisions of two or more firms significantly affect each others' profits
Interdependence
Payoff matrix
Mutual interdependence
Equilibrium
48. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Basis for Product Differentiation
Empty threat
Cutthroat Competition
Perfect Competition (characteristics)
49. The exclusive right to a product for a period of 20 years from the date the product is invented
Prisoner's dilemma
Payoff matrix
First-Degree Price Discrimination (Perfect)
Patent
50. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Credible threat
Bargaining Power of Buyers
Horizontal Merger/Integration