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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 product's ability to satisfy a large number of consumers at the same time
Vertical Merger
Cutthroat Competition
Undifferentiated
Simultaneous consumption
2. 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
Bertrand oligopoly
Strategic behavior
Normal-form game
Non-cooperative equilibrium
3. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Cutthroat Competition
Natural Monopoly (local phone or electric company)
Network effects
Nonprime competition
4. A firm whose price decisions are tacitly accepted and followed by others in the industry
Price Leadership
Minimum efficient scale (full capacity)
Kinked demand curve model
Sequential-move game
5. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Mixed (randomized) strategy
Product differentiation
Bargaining Power of Buyers
Payoff matrix
6. Using advertising and other means to try to increase a firm's sales
Minimum efficient scale (full capacity)
Non-price competition
Profit
Kinked-demand curve
7. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Tacit collusion
Herfindahl-Hirschman index (HHI)
Indefinitely repeated game
Maximizing profit in Oligopoly games
8. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Inefficiency
Cooperation
Payoff matrix
Cross-subsidy pricing
9. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Bertrand oligopoly
Third-degree price discrimination
Four-firm concentration ratio
Contestable market
10. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Payoff table
Randomized pricing
Perfect Competition Short Run Supply
Examples of Monopolistic Competition
11. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking
Perfect Competitor Making a Profit
Credible threat
Imperfect competition
Oligopoly
12. Face competition from companies that currently are not in the market but might enter
Strategy
Lerner index
Cooperative equilibrium
The Threat from Potential Entrants Firms
13. 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
Dominant strategy equilibrium
Kinked demand curve model
Trigger strategy
Prisoners' dilemma
14. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Indefinitely repeated game
Second-Degree Price Discrimination
Dominant firm oligopoly
Contestable market
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
Payoff matrix
Homogenous oligopoly
Dansby-Willig performance index
Payoff table
16. A situation in which a change in price strategy by one firm affects sales and profits of another
Cutthroat Competition
Cross-subsidy pricing
Bargaining Power of Buyers
Mutual interdependence
17. Simultaneous move game that is not repeated
Vertical Merger
Perfect Competitor Characteristics
No cooperative equilibrium
One-shot game
18. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Price war
Prisoners' dilemma
Perfect Competitor Characteristics
Rothschild index
19. 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
Ownership of a Key Input
Common knowledge
Brand Multiplication
Kinked-demand curve
20. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Undifferentiated
Third-Degree Price Discrimination
Joint Venture
Equilibrium
21. Specific assets - Economies of scale - Excess capacity - Reputation effects
Repeated game
Perfect Competition Barriers to Entry
Monopoly (characteristics)
Minimum efficient scale (full capacity)
22. Both players have dominant strategies and play them
Dominant strategy equilibrium
Joint Venture
Mixed (randomized) strategy
Cournot equilibrium
23. 1/(1+i)n
Present Value (PV)
Price war
Third-degree price discrimination
Sequential-move game
24. The competition for sales between the products of one industry and the products of another industry
Profit
Non-cooperative behavior
Inter-industry competition
Tit-for-tat strategy
25. An oligopoly in which the firms produce a standardized product
Homogenous oligopoly
Tacit collusion
Limit price
Market
26. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Socially optimal price
Competitive market
No cooperative equilibrium
Product differentiation
27. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Simultaneous decision games
Dominant firm oligopoly
Mixed (randomized) strategy
Bargaining Power of Buyers
28. 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
Transfer pricing
Dominant firm oligopoly
First-mover advantage
Double marginalization
29. A strategy or action that always provides the best outcome no matter what decisions rivals make
Network effects
Dominant strategy
Rent-seeking behavior
Product Differentiation
30. 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
Monopolistic Characteristics:
Duopoly
Herfindahl-Hirschman index (HHI)
31. 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
Block pricing
Ownership of a Key Input
Four-firm concentration ratio
Mutual interdependence
32. 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
Basis for Product Differentiation
Kinked-demand curve
Monopolistic Competition
33. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Brand Multiplication
Minimum efficient scale (full capacity)
What is game?
Second-Degree Price Discrimination
34. First firm to set its output (Stackelberg's model)
High Price Elasticity
Price war
Leader
Double marginalization
35. Actions taken by a firm to achieve a goal - such as maximizing profits
Product Differentiation
Fair return price
Two-part Tariff Method of Pricing
Business strategy
36. 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"
Leader
Non-rivalrous consumption
Credible threat
Differentiated oligopoly
37. The competition that domestic firms encounter from the products and services of foreign producers
Product differentiation
Import competition
Cooperative equilibrium
Herfindahl-Hirschman index (HHI)
38. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar
Imperfect competition
Strategic behavior
Dominant firm oligopoly
Mutual Interdependence
39. In game theory - a game that is played again sometime after the previous game ends
Differentiated oligopoly
Primary Sources of Monopolistic Power
Repeated game
Payoff matrix
40. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
Empty threat
Common knowledge
Market
41. 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
Extensive-form game
Sequential-move game
Homogenous oligopoly
Strategic behavior
42. In game theory - benefit obtained by party that moves first in a sequential game
Business strategy
Minimum efficient scale (full capacity)
First-mover advantage
Disappearing invisible hand
43. Increases in the value of a product to each user - including existing users - as the total number of users rises
Network effects
Sequential-move game
Repeated game
High Price Elasticity
44. 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
Subgame perfect equilibrium
Non-price competition
Socially optimal price
Two-part Tariff Method of Pricing
45. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Transfer pricing
Business strategy
Price discrimination
Tacit collusion
46. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Differentiated oligopoly
Fair return price
Indefinitely repeated game
Import competition
47. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans
Economies of scale
Third-degree price discrimination
Implicit Collusion
Bertrand oligopoly
48. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Imperfect competition
Business strategy
Empty threat
Four-firm concentration ratio
49. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Duopoly
Prisoners' dilemma
Payoff table
Open Collusion
50. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Rothschild index
Fair return price
Non-rivalrous consumption
Double marginalization