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Test your basic knowledge |
Business Competition
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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. An oligopoly in which the firms produce a differentiated product
Differentiated oligopoly
High Price Elasticity
Kinked-demand curve
Price Leadership
2. 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
Cournot oligopoly
Payoff matrix
Bargaining Power of Suppliers
Kinked-demand curve
3. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Concentration Ratio
What is game?
Credible threat
Natural Monopoly (local phone or electric company)
4. All firms and individuals willing and able to buy or sell a particular product
No cooperative equilibrium
Patent
Market
Conglomerate Merger
5. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Leader
Credible threat
Import competition
6. In game theory - benefit obtained by party that moves first in a sequential game
Reservation Price
First-mover advantage
Unbalanced Oligopoly
Stackelberg oligopoly
7. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Payoff matrix
Empty threat
First-Degree Price Discrimination (Perfect)
Randomized pricing
8. A business arrangement in which two or more firms undertake a specific economic activity together. Once the activity is over - the firms go their own way
Import competition
Joint Venture
Market Structure
Monopolistic Competition
9. A situation in which no one wants to change his or her behavior
First-Degree Price Discrimination (Perfect)
Undifferentiated
Marginal Revenue
Equilibrium
10. Demand line is above ATC curve
Payoff matrix
Perfect Competitor Making a Profit
Horizontal Merger/Integration
Sweezy oligopoly
11. Price Sensitive
Perfect Competition Long Run Supply
High Price Elasticity
Market Structure
Unbalanced Oligopoly
12. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Tit-for-tat strategy
Dominant firm oligopoly
Four-firm concentration ratio
Dansby-Willig performance index
13. 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)
Follower
Simultaneous decision games
Four-firm concentration ratio
Trigger strategy
14. A simpler way to operationalize first-degree price discrimination
Two-part Tariff Method of Pricing
Transfer pricing
Prisoner's dilemma
Credible threat
15. If production of a good requires a particular input - then control of that input can be a barrier to entry
Present Value (PV)
Ownership of a Key Input
Strategy
Sweezy oligopoly
16. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Normal-form game
Credible threat
Business strategy
Reservation Price
17. Increases in the value of a product to each user - including existing users - as the total number of users rises
Four-firm concentration ratio
Network effects
Payoff
Limit pricing
18. Using advertising and other means to try to increase a firm's sales
Interdependence
Transfer pricing
Kinked demand curve model
Non-price competition
19. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Joint Venture
Non-rivalrous consumption
Conglomerate Merger
Simultaneous consumption
20. Produce identical products
Perfect Competitor Characteristics
Dominant strategy
Payoff
Cournot oligopoly
21. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Second-Degree Price Discrimination
Cooperation
Prisoners' dilemma
High Price Elasticity
22. Actions taken by a firm to achieve a goal - such as maximizing profits
Business strategy
Oligopoly
Kinked-demand curve
Perfect Competitor Characteristics
23. Steel - autos - colas - airlines
Dansby-Willig performance index
Examples of Oligopoly
Imperfect competition
Ownership of a Key Input
24. A strategy or action that always provides the best outcome no matter what decisions rivals make
Dominant strategy
Non-price competition
Strategic behavior
Price matching
25. 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
Examples of Monopolistic Competition
Trigger strategy
Dominant firm oligopoly
Collusion
26. A product's ability to satisfy a large number of consumers at the same time
Vertical Merger
Simultaneous consumption
High Price Elasticity
Cross-subsidy pricing
27. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Transfer pricing
Simultaneous decision games
Payoff table
Simultaneous-move game
28. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly
Limit pricing
Follower
Reservation Price
Finding profit for oligopoly games
29. 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
Homogenous oligopoly
Economies of scale
Simultaneous-move game
Non-cooperative equilibrium
30. 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
Tit-for-tat strategy
Dansby-Willig performance index
Marginal Revenue
Two-part pricing
31. 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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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
Socially optimal price
Tacit collusion
Limit pricing
Normal-form game
33. 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
High Price Elasticity
Double marginalization
Economies of scale
Repeated game
34. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Fair return price
Price war
Monopolistic Characteristics:
Third-Degree Price Discrimination
35. The competition for sales between the products of one industry and the products of another industry
Stackelberg oligopoly
Product differentiation
Non-price competition
Inter-industry competition
36. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Network effects
Natural Monopoly (local phone or electric company)
Perfect Competition (characteristics)
Commodity bundling
37. 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
No cooperative equilibrium
The Threat from Potential Entrants Firms
Bertrand oligopoly
Pure monopoly
38. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games
Dominant strategy equilibrium
Inter-industry competition
Stackelberg oligopoly
Disappearing invisible hand
39. Variations on one good so that a firm can increase market sharea
Finding profit for oligopoly games
Brand Multiplication
Patent
Non-cooperative equilibrium
40. Maximize economic profit by producing the quantity at which MC=MR
Nash equilibrium
Interdependence
Maximizing profit in Oligopoly games
Basis for Product Differentiation
41. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Kinked-demand curve
Rent-seeking behavior
Strategy
Brand Multiplication
42. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Indefinitely repeated game
Perfect Competitor Making a Profit
One-shot game
Randomized pricing
43. The practice of charging different prices to consumers for the same good or service
Price discrimination
Normal-form game
Cooperation
Herfindahl-Hirschman index (HHI)
44. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Product Differentiation
Mutual interdependence
Simultaneous decision games
Nonprime competition
45. The situation when a firm's long-run average costs fall as it increases output
Import competition
Market
Economies of scale
Price Leadership
46. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Cooperation
Sequential game
Product Differentiation
Third-degree price discrimination
47. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Finding profit for oligopoly games
Pure monopoly
First-mover advantage
Vertical Merger
48. 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
Cheating
Joint Venture
Third-degree price discrimination
Socially optimal price
49. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy
Kinked demand curve model
Reservation Price
Block pricing
Nash equilibrium
50. The exclusive right to a product for a period of 20 years from the date the product is invented
Repeated game
Common knowledge
Open Collusion
Patent