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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 practice of charging different prices to consumers for the same good or service
Credible threat
Price discrimination
Cournot oligopoly
Perfect Competition Barriers to Entry
2. Rules - strategies - payoffs - outcomes
Trigger strategy
What is game?
Socially optimal price
No cooperative equilibrium
3. 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
Prisoners' dilemma
Limit price
Price discrimination
Bargaining Power of Suppliers
4. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Simultaneous decision games
Concentration Ratio
Differentiated oligopoly
Merger
5. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Fair return price
Non-rivalrous consumption
First-Degree Price Discrimination (Perfect)
Non-price competition
6. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Common knowledge
Two-part Tariff Method of Pricing
Competitive market
Concentration Ratio
7. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Examples of Oligopoly
Present Value (PV)
Non-rivalrous consumption
Profit
8. The price that is low enough to deter entry
Mixed (randomized) strategy
Limit price
Bargaining Power of Buyers
Cooperative equilibrium
9. Game in which one player makes a move after observing the other player's move
Perfect Competition (characteristics)
Examples of Monopolistic Competition
Sequential-move game
Interdependence
10. In game theory - benefit obtained by party that moves first in a sequential game
Monopoly (characteristics)
Payoff table
Rothschild index
First-mover advantage
11. The competition for sales between the products of one industry and the products of another industry
Dominant strategy
No cooperative equilibrium
Inter-industry competition
Oligopoly
12. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Price war
Oligopoly
What is game?
Third-Degree Price Discrimination
13. Actions taken by a firm to achieve a goal - such as maximizing profits
Business strategy
Unbalanced Oligopoly
Commodity bundling
Normal-form game
14. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Vertical Merger
Payoff matrix
Contestable market
Lerner index
15. Ignoring the effects of their actions on each others' profits
Non-cooperative behavior
Covert Collusion
Prisoners' dilemma
Contestable market
16. The situation when a firm's long-run average costs fall as it increases output
Pure monopoly
Economies of scale
One-shot game
Tacit collusion
17. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Examples of Oligopoly
Perfect Competition Long Run Supply
Competitive market
18. 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
Double marginalization
Cheating
What is game?
Socially optimal price
19. Simultaneous move game that is not repeated
Payoff matrix
Contestable market
High Price Elasticity
One-shot game
20. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Tit-for-tat strategy
Economies of scale
Perfect Competitor Making a Profit
Disappearing invisible hand
21. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)
Undifferentiated
Payoff matrix
Follower
Four-firm concentration ratio
22. First firm to set its output (Stackelberg's model)
Simultaneous-move game
Product Differentiation
Leader
Patent
23. Face competition from companies that currently are not in the market but might enter
Duopoly
Four-firm concentration ratio
Basis for Product Differentiation
The Threat from Potential Entrants Firms
24. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Transfer pricing
Brand Multiplication
Horizontal Merger/Integration
Dansby-Willig performance index
25. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Finding profit for oligopoly games
Payoff
No cooperative equilibrium
Economies of scale
26. Variations on one good so that a firm can increase market sharea
Repeated game
Present Value (PV)
Brand Multiplication
Interdependence
27. 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
Simultaneous consumption
Monopolistic Competition
Subgame perfect equilibrium
Rothschild index
28. Steel - autos - colas - airlines
Examples of Oligopoly
Common knowledge
Product differentiation
Mutual interdependence
29. Specific assets - Economies of scale - Excess capacity - Reputation effects
Competitive market
Perfect Competition Barriers to Entry
Implicit Collusion
Indefinitely repeated game
30. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Cournot oligopoly
Fair return price
Simultaneous-move game
Open Collusion
31. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Tacit collusion
Unbalanced Oligopoly
Dominant strategy
Normal-form game
32. All firms and individuals willing and able to buy or sell a particular product
Market
Limit pricing
Repeated game
Competitive market
33. The competition that domestic firms encounter from the products and services of foreign producers
Economies of scale
Tacit collusion
Import competition
Cournot oligopoly
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
Competitive market
Sequential game
Equilibrium
Merger
35. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Monopoly (characteristics)
Perfect Competition (characteristics)
Fair return price
Commodity bundling
36. 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
Payoff matrix
Lerner index
Extensive-form game
Bertrand oligopoly
37. An oligopoly in which the firms produce a standardized product
Two-part Tariff Method of Pricing
Common knowledge
Homogenous oligopoly
Peak-load pricing
38. The derivative of total revenue
Open Collusion
Marginal Revenue
Nash equilibrium
Two-part Tariff Method of Pricing
39. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Cooperation
Follower
Limit pricing
Dominant strategy equilibrium
40. 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
Oligopoly
Common knowledge
Conglomerate Merger
Subgame perfect equilibrium
41. Game in which each player makes decisions without knowledge of the other player's decisions
Simultaneous-move game
Covert Collusion
Two-part pricing
Tit-for-tat strategy
42. A strategy that guarantees the highest payoff given the worst possible scenario
Secure strategy
Simultaneous-move game
Stackelberg oligopoly
Lerner index
43. The practice of bundling several different products together and selling them at a single "bundle" price
Strategic behavior
Indefinitely repeated game
Fair return price
Commodity bundling
44. Rival who sets its output after the leader (Stackelberg's model)
Maximizing profit in Oligopoly games
Follower
Merger
Limit pricing
45. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Simultaneous decision games
Perfect Competitor Making a Profit
Bargaining Power of Buyers
Cross-subsidy pricing
46. Cooperation among firms that does not involve an explicit agreement
Monopolistic Competition
Price discrimination
Tacit collusion
Vertical Merger
47. Long-run marginal cost curve above long-run average cost
Implicit Collusion
Perfect Competition Long Run Supply
Competitive market
Mutual Interdependence
48. The physical characteristics of the market within which firms interact
Payoff table
Market Structure
Double marginalization
Duopoly
49. Demand line is above ATC curve
Strategic behavior
Collusion
Perfect Competition (characteristics)
Perfect Competitor Making a Profit
50. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Nonprime competition
Pure monopoly
Peak-load pricing
Brand Multiplication