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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
Commodity bundling
Two-part pricing
Marginal Revenue
Market Structure
2. Rival who sets its output after the leader (Stackelberg's model)
Follower
Double marginalization
Repeated game
Equilibrium
3. 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
Two-part pricing
Indefinitely repeated game
Third-degree price discrimination
Subgame perfect equilibrium
4. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Non-cooperative behavior
Strategy
Monopolistic Characteristics:
Tacit collusion
5. An oligopoly in which the firms produce a differentiated product
Differentiated oligopoly
Concentration Ratio
Cross-subsidy pricing
Prisoners' dilemma
6. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Price war
Primary Sources of Monopolistic Power
Open Collusion
Unbalanced Oligopoly
7. When a manager makes a noncooperative decision
Cheating
No cooperative equilibrium
Rent-seeking behavior
Indefinitely repeated game
8. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Socially optimal price
Oligopoly
Cross-subsidy pricing
Rent-seeking behavior
9. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Minimum efficient scale (full capacity)
Open Collusion
Inefficiency
Imperfect competition
10. 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
Lerner index
Inter-industry competition
Examples of Oligopoly
Monopolistic Competition
11. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Simultaneous decision games
Socially optimal price
Merger
Non-cooperative equilibrium
12. The practice of charging different prices to consumers for the same good or service
Inefficiency
Merger
Sequential game
Price discrimination
13. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Duopoly
Extensive-form game
Non-rivalrous consumption
Double marginalization
14. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Prisoners' dilemma
Kinked demand curve model
Randomized pricing
15. Increases in the value of a product to each user - including existing users - as the total number of users rises
Cournot oligopoly
Network effects
Minimum efficient scale (full capacity)
Fair return price
16. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Payoff matrix
Minimum efficient scale (full capacity)
Double marginalization
Concentration Ratio
17. 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)
Ownership of a Key Input
Homogenous oligopoly
Barrier to entry
Vertical Merger
18. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Bargaining Power of Suppliers
Vertical Merger
Perfect Competition (characteristics)
Present Value (PV)
19. Variations on one good so that a firm can increase market sharea
Brand Multiplication
Business strategy
Perfect Competition (characteristics)
Lerner index
20. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies
Price discrimination
Cournot equilibrium
Perfect Competition (characteristics)
Subgame perfect equilibrium
21. A situation in which a change in price strategy by one firm affects sales and profits of another
Perfect Competition (characteristics)
Mutual interdependence
Strategic behavior
Marginal Revenue
22. Steel - autos - colas - airlines
Product Differentiation
Examples of Oligopoly
Payoff table
Prisoners' dilemma
23. Demand line is above ATC curve
Product Differentiation
Two-part pricing
Perfect Competitor Making a Profit
Bargaining Power of Suppliers
24. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Two-part pricing
Economies of scale
Empty threat
25. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Double marginalization
Imperfect competition
Block pricing
Extensive-form game
26. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Secure strategy
Empty threat
Third-Degree Price Discrimination
Perfect Competition Barriers to Entry
27. Revenue-Costs
Present Value (PV)
Price Leadership
Examples of Monopolistic Competition
Profit
28. Keeps the price just where it is to maximize profit
Conglomerate Merger
Basis for Product Differentiation
Cutthroat Competition
Kinked demand curve model
29. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Cooperation
Implicit Collusion
Payoff matrix
Natural Monopoly (local phone or electric company)
30. 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
What is game?
Rothschild index
Perfect Competition Barriers to Entry
Nash equilibrium
31. A combination of two or more companies into one company
Disappearing invisible hand
Sequential-move game
Merger
Prisoner's dilemma
32. 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
Tacit collusion
Block pricing
Perfect Competition Barriers to Entry
High Price Elasticity
33. An equilibrium in a game in which players cooperate to increase their mutual payoff
Product differentiation
Cooperative equilibrium
Price war
Vertical Merger
34. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Nonprime competition
Interdependence
Normal-form game
Extensive-form game
35. Single firm is sole producer of a product for which there are no close substitutes
Perfect Competition Short Run Supply
Pure monopoly
The Threat from Potential Entrants Firms
Bargaining Power of Suppliers
36. Takes Place inside the Mind of the consumer
Normal-form game
What is game?
Product Differentiation
Equilibrium
37. Toothpaste - shampoo - restaurants - banks
Normal-form game
Examples of Monopolistic Competition
Finding profit for oligopoly games
Cooperation
38. The smallest quantity at which the average cost curve reaches its minimum
Basis for Product Differentiation
Indefinitely repeated game
Minimum efficient scale (full capacity)
Nash equilibrium
39. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Socially optimal price
Limit pricing
Price war
One-shot game
40. Maximize economic profit by producing the quantity at which MC=MR
First-mover advantage
Maximizing profit in Oligopoly games
Empty threat
Randomized pricing
41. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Simultaneous consumption
Subgame perfect equilibrium
Ownership of a Key Input
Second-Degree Price Discrimination
42. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Profit
Present Value (PV)
Sequential-move game
43. 1/(1+i)n
Inter-industry competition
Horizontal Merger/Integration
Present Value (PV)
Two-part Tariff Method of Pricing
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
Commodity bundling
Cutthroat Competition
Perfect Competition Short Run Supply
Socially optimal price
45. Game in which each player makes decisions without knowledge of the other player's decisions
Cheating
Limit price
Interdependence
Simultaneous-move game
46. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Two-part pricing
Monopoly (characteristics)
Product differentiation
High Price Elasticity
47. A product's ability to satisfy a large number of consumers at the same time
Basis for Product Differentiation
Homogenous oligopoly
Simultaneous consumption
Undifferentiated
48. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Monopoly (characteristics)
Transfer pricing
Follower
Normal-form game
49. 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
Unbalanced Oligopoly
Repeated game
Monopolistic Competition
Prisoner's dilemma
50. Cooperation among firms that does not involve an explicit agreement
Product differentiation
Second-Degree Price Discrimination
Tacit collusion
Price war