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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. The derivative of total revenue
Marginal Revenue
Dominant strategy equilibrium
Lerner index
Randomized pricing
2. 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
Perfect Competitor Making a Profit
Cooperative equilibrium
Kinked-demand curve
Monopoly (characteristics)
3. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Perfect Competition Long Run Supply
Mutual Interdependence
Payoff matrix
Transfer pricing
4. Demand line is above ATC curve
Cooperation
Tacit collusion
Herfindahl-Hirschman index (HHI)
Perfect Competitor Making a Profit
5. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Conglomerate Merger
Fair return price
Covert Collusion
Primary Sources of Monopolistic Power
6. A firm whose price decisions are tacitly accepted and followed by others in the industry
Finding profit for oligopoly games
Price Leadership
Merger
Perfect Competition Long Run Supply
7. An oligopoly in which the firms produce a standardized product
Peak-load pricing
Credible threat
Brand Multiplication
Homogenous oligopoly
8. Keeps the price just where it is to maximize profit
Extensive-form game
Cutthroat Competition
Two-part pricing
Dominant strategy
9. Revenue-Costs
Contestable market
Profit
Differentiated oligopoly
Monopoly (characteristics)
10. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Present Value (PV)
Common knowledge
Sequential game
Product Differentiation
11. First firm to set its output (Stackelberg's model)
Cournot oligopoly
Bertrand oligopoly
Collusion
Leader
12. 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.)
Monopolistic Characteristics:
Price discrimination
Market Structure
Simultaneous decision games
13. 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
Business strategy
Double marginalization
High Price Elasticity
Perfect Competition Long Run Supply
14. 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
Present Value (PV)
Simultaneous-move game
Extensive-form game
Disappearing invisible hand
15. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Horizontal Merger/Integration
Nash equilibrium
Payoff matrix
Two-part Tariff Method of Pricing
16. Produce identical products
Two-part Tariff Method of Pricing
Vertical Merger
Perfect Competitor Characteristics
Non-rivalrous consumption
17. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Minimum efficient scale (full capacity)
Non-rivalrous consumption
Third-Degree Price Discrimination
Common knowledge
18. The practice of charging different prices to consumers for the same good or service
Price discrimination
Cooperative equilibrium
Two-part pricing
Joint Venture
19. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Mutual Interdependence
Payoff
Tit-for-tat strategy
Second-Degree Price Discrimination
20. Specific assets - Economies of scale - Excess capacity - Reputation effects
Sweezy oligopoly
Perfect Competition Barriers to Entry
Subgame perfect equilibrium
Kinked demand curve model
21. 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
Undifferentiated
Two-part pricing
Prisoner's dilemma
Sweezy oligopoly
22. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Two-part pricing
Imperfect competition
Nonprime competition
Examples of Monopolistic Competition
23. Identical or substitutable
Herfindahl-Hirschman index (HHI)
Double marginalization
Undifferentiated
Simultaneous-move game
24. The exclusive right to a product for a period of 20 years from the date the product is invented
Rent-seeking behavior
Price discrimination
Strategy
Patent
25. Marginal cost curve above average variable cost - P* = SRMC
Indefinitely repeated game
Perfect Competition Short Run Supply
Rothschild index
Present Value (PV)
26. An oligopoly in which the firms produce a differentiated product
Bargaining Power of Buyers
Fair return price
Differentiated oligopoly
Cooperation
27. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Perfect Competition Long Run Supply
Examples of Monopolistic Competition
Randomized pricing
Horizontal Merger/Integration
28. Cooperation among firms that does not involve an explicit agreement
Tacit collusion
Limit pricing
Tit-for-tat strategy
Reservation Price
29. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Tacit collusion
Business strategy
Mixed (randomized) strategy
First-Degree Price Discrimination (Perfect)
30. Takes Place inside the Mind of the consumer
Transfer pricing
Leader
Product Differentiation
Tit-for-tat strategy
31. A strategy or action that always provides the best outcome no matter what decisions rivals make
Limit price
Examples of Monopolistic Competition
Dominant strategy
Dansby-Willig performance index
32. The practice of bundling several different products together and selling them at a single "bundle" price
Four-firm concentration ratio
Commodity bundling
Extensive-form game
Dansby-Willig performance index
33. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Nash equilibrium
First-Degree Price Discrimination (Perfect)
Cooperation
Primary Sources of Monopolistic Power
34. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Perfect Competition (characteristics)
Cooperation
Inter-industry competition
Nonprime competition
35. Increases in the value of a product to each user - including existing users - as the total number of users rises
Leader
Simultaneous decision games
Network effects
Non-cooperative equilibrium
36. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Vertical Merger
Business strategy
Dominant strategy equilibrium
Unbalanced Oligopoly
37. A combination of two or more companies into one company
Secure strategy
Merger
Tit-for-tat strategy
Perfect Competition (characteristics)
38. A product's ability to satisfy a large number of consumers at the same time
Simultaneous consumption
Payoff matrix
Barrier to entry
Two-part Tariff Method of Pricing
39. Actions taken by firms to plan for and react to competition from rival firms
Inter-industry competition
Strategic behavior
Kinked demand curve model
Barrier to entry
40. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Perfect Competition (characteristics)
Monopoly (characteristics)
Simultaneous consumption
Cross-subsidy pricing
41. Game in which one player makes a move after observing the other player's move
Cross-subsidy pricing
Sequential-move game
Two-part Tariff Method of Pricing
Import competition
42. In game theory - a game that is played again sometime after the previous game ends
Repeated game
Natural Monopoly (local phone or electric company)
The Threat from Potential Entrants Firms
Simultaneous consumption
43. 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
Joint Venture
Block pricing
First-Degree Price Discrimination (Perfect)
Bargaining Power of Suppliers
44. Simultaneous move game that is not repeated
Prisoners' dilemma
Cutthroat Competition
Third-Degree Price Discrimination
One-shot game
45. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Concentration Ratio
Oligopoly
Simultaneous consumption
High Price Elasticity
46. Involves price-fixing
Unbalanced Oligopoly
Kinked demand curve model
Network effects
Covert Collusion
47. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Randomized pricing
Socially optimal price
Imperfect competition
Payoff table
48. 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
Monopolistic Competition
Cooperative equilibrium
Monopolistic Characteristics:
Lerner index
49. When a manager makes a noncooperative decision
Cheating
Unbalanced Oligopoly
Price matching
Payoff
50. Rival who sets its output after the leader (Stackelberg's model)
Concentration Ratio
Follower
Transfer pricing
Tacit collusion