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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. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Horizontal Merger/Integration
Simultaneous decision games
Indefinitely repeated game
Empty threat
2. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Double marginalization
Bargaining Power of Suppliers
Sequential game
Non-rivalrous consumption
3. Toothpaste - shampoo - restaurants - banks
Oligopoly
Examples of Monopolistic Competition
Brand Multiplication
First-Degree Price Discrimination (Perfect)
4. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Mutual interdependence
Payoff table
Commodity bundling
Unbalanced Oligopoly
5. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Inefficiency
Open Collusion
Secure strategy
One-shot game
6. Takes Place inside the Mind of the consumer
Common knowledge
Joint Venture
Product Differentiation
Strategic behavior
7. 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
Common knowledge
Reservation Price
Extensive-form game
Dominant strategy equilibrium
8. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Imperfect competition
Conglomerate Merger
Nash equilibrium
Equilibrium
9. The rules describe the setting of the game - the actions the players may take - and the consequences of those actions; -Advertising and R&D are also prisoners' dilemmas
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10. Specific assets - Economies of scale - Excess capacity - Reputation effects
Non-rivalrous consumption
High Price Elasticity
Perfect Competition Barriers to Entry
Ownership of a Key Input
11. In game theory - a game that is played again sometime after the previous game ends
Product Differentiation
Repeated game
Non-cooperative behavior
Perfect Competitor Characteristics
12. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Competitive market
Price Leadership
Payoff
First-Degree Price Discrimination (Perfect)
13. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Concentration Ratio
Rent-seeking behavior
Strategic behavior
Price Leadership
14. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Normal-form game
Perfect Competition Barriers to Entry
Inter-industry competition
15. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination
Duopoly
Bargaining Power of Suppliers
Dansby-Willig performance index
Payoff table
16. 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
Perfect Competition Long Run Supply
Competitive market
High Price Elasticity
Mutual Interdependence
17. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry
Limit pricing
Monopolistic Competition
Barrier to entry
Imperfect competition
18. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Stackelberg oligopoly
Equilibrium
Strategic behavior
Randomized pricing
19. 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)
Tacit collusion
Cutthroat Competition
Nash equilibrium
Barrier to entry
20. Actions taken by a firm to achieve a goal - such as maximizing profits
Perfect Competition (characteristics)
Business strategy
Merger
Contestable market
21. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Limit pricing
Non-rivalrous consumption
Common knowledge
22. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Bargaining Power of Buyers
Monopolistic Competition
Prisoners' dilemma
Third-Degree Price Discrimination
23. Actions taken by firms to plan for and react to competition from rival firms
Non-cooperative behavior
Competitive market
Strategic behavior
Double marginalization
24. A situation in which neither firm has incentive to change its output given the other firm's output
Cournot equilibrium
Competitive market
Non-cooperative equilibrium
Leader
25. 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.)
Cheating
Mutual Interdependence
Non-price competition
Monopolistic Characteristics:
26. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Strategy
Reservation Price
Examples of Monopolistic Competition
One-shot game
27. Single firm is sole producer of a product for which there are no close substitutes
Import competition
Maximizing profit in Oligopoly games
Pure monopoly
Double marginalization
28. A strategy that guarantees the highest payoff given the worst possible scenario
Secure strategy
Inter-industry competition
Perfect Competitor Making a Profit
Rothschild index
29. If production of a good requires a particular input - then control of that input can be a barrier to entry
Ownership of a Key Input
Payoff matrix
Vertical Merger
Product differentiation
30. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Perfect Competitor Making a Profit
Finding profit for oligopoly games
Basis for Product Differentiation
Third-degree price discrimination
31. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Bertrand oligopoly
Perfect Competition Long Run Supply
Sequential game
Primary Sources of Monopolistic Power
32. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Herfindahl-Hirschman index (HHI)
Ownership of a Key Input
Nonprime competition
Tacit collusion
33. Long-run marginal cost curve above long-run average cost
Perfect Competition Long Run Supply
Market Structure
Homogenous oligopoly
Bargaining Power of Buyers
34. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Ownership of a Key Input
Non-price competition
Cross-subsidy pricing
Cutthroat Competition
35. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Commodity bundling
Mixed (randomized) strategy
Follower
Limit pricing
36. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Monopoly (characteristics)
Cooperation
Socially optimal price
Dominant firm oligopoly
37. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Mixed (randomized) strategy
Imperfect competition
Duopoly
Third-degree price discrimination
38. Demand line is above ATC curve
Perfect Competitor Making a Profit
Payoff
Perfect Competition Long Run Supply
Business strategy
39. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Tacit collusion
Nonprime competition
High Price Elasticity
Collusion
40. Game in which one player makes a move after observing the other player's move
Joint Venture
Price war
Sequential-move game
Extensive-form game
41. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Two-part pricing
Stackelberg oligopoly
Vertical Merger
Equilibrium
42. 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
Strategy
Marginal Revenue
Credible threat
Contestable market
43. In game theory - benefit obtained by party that moves first in a sequential game
Primary Sources of Monopolistic Power
First-mover advantage
Interdependence
Transfer pricing
44. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Normal-form game
Mutual interdependence
Payoff
Repeated game
45. All firms and individuals willing and able to buy or sell a particular product
Sweezy oligopoly
Covert Collusion
Market
Indefinitely repeated game
46. The practice of charging different prices to consumers for the same good or service
Cross-subsidy pricing
Payoff matrix
Secure strategy
Price discrimination
47. Rival who sets its output after the leader (Stackelberg's model)
Rent-seeking behavior
Follower
Herfindahl-Hirschman index (HHI)
Marginal Revenue
48. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Imperfect competition
Four-firm concentration ratio
Commodity bundling
49. 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
Block pricing
Double marginalization
Follower
Present Value (PV)
50. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Perfect Competitor Characteristics
Examples of Monopolistic Competition
Concentration Ratio
Dansby-Willig performance index