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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. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Simultaneous consumption
Competitive market
Transfer pricing
Monopoly (characteristics)
2. The price that is low enough to deter entry
Herfindahl-Hirschman index (HHI)
Indefinitely repeated game
Present Value (PV)
Limit price
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
Implicit Collusion
Two-part pricing
Payoff table
Strategic behavior
4. When a manager makes a noncooperative decision
Cheating
Pure monopoly
Lerner index
Reservation Price
5. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Prisoner's dilemma
Sequential game
Imperfect competition
6. 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
Monopoly (characteristics)
Payoff table
Empty threat
Import competition
7. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Commodity bundling
Oligopoly
Price war
Limit pricing
8. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Non-cooperative equilibrium
No cooperative equilibrium
Dominant strategy
Contestable market
9. Industry where (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) each form believes rivals will hold their output constant if it changes its output; and (4) barriers to entry exist. Fi
Marginal Revenue
Cournot oligopoly
Conglomerate Merger
Joint Venture
10. The practice of charging different prices to consumers for the same good or service
Payoff
Strategic behavior
Duopoly
Price discrimination
11. Keeps the price just where it is to maximize profit
Tacit collusion
Cutthroat Competition
Inter-industry competition
Second-Degree Price Discrimination
12. A combination of two or more companies into one company
Merger
Sequential game
Perfect Competition Long Run Supply
Finding profit for oligopoly games
13. Face competition from companies that currently are not in the market but might enter
Extensive-form game
The Threat from Potential Entrants Firms
Competitive market
Minimum efficient scale (full capacity)
14. 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
Profit
Interdependence
Competitive market
Secure strategy
15. All firms and individuals willing and able to buy or sell a particular product
Present Value (PV)
Cournot equilibrium
Interdependence
Market
16. Involves price-fixing
Dominant strategy equilibrium
Price discrimination
Import competition
Covert Collusion
17. Game in which each player makes decisions without knowledge of the other player's decisions
First-mover advantage
One-shot game
Marginal Revenue
Simultaneous-move game
18. Actions taken by a firm to achieve a goal - such as maximizing profits
Open Collusion
Horizontal Merger/Integration
Business strategy
Equilibrium
19. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Trigger strategy
Import competition
Fair return price
Open Collusion
20. A firm whose price decisions are tacitly accepted and followed by others in the industry
Cutthroat Competition
Leader
Inter-industry competition
Price Leadership
21. 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
Product differentiation
Tit-for-tat strategy
Socially optimal price
Non-rivalrous consumption
22. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Cross-subsidy pricing
Sequential game
Cournot equilibrium
Nonprime competition
23. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Non-rivalrous consumption
Tacit collusion
Reservation Price
Market
24. 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
Limit pricing
Rent-seeking behavior
Trigger strategy
Cooperative equilibrium
25. 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
High Price Elasticity
Unbalanced Oligopoly
Network effects
Bargaining Power of Suppliers
26. 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
Non-price competition
Peak-load pricing
Limit pricing
Fair return price
27. 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)
Payoff matrix
Barrier to entry
One-shot game
Double marginalization
28. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Product differentiation
Fair return price
Dansby-Willig performance index
Market
29. The situation when a firm's long-run average costs fall as it increases output
Economies of scale
Non-cooperative behavior
Repeated game
Payoff matrix
30. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Peak-load pricing
Socially optimal price
High Price Elasticity
Horizontal Merger/Integration
31. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Prisoner's dilemma
Non-rivalrous consumption
Cooperation
Examples of Monopolistic Competition
32. Maximize economic profit by producing the quantity at which MC=MR
Undifferentiated
Market Structure
Joint Venture
Maximizing profit in Oligopoly games
33. 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
Price discrimination
Maximizing profit in Oligopoly games
Dominant firm oligopoly
First-mover advantage
34. 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.)
Tit-for-tat strategy
Conglomerate Merger
Monopoly (characteristics)
Monopolistic Characteristics:
35. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Randomized pricing
Third-Degree Price Discrimination
Non-cooperative behavior
Product differentiation
36. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Price discrimination
Patent
Duopoly
Basis for Product Differentiation
37. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Economies of scale
Perfect Competitor Making a Profit
Perfect Competitor Characteristics
Mixed (randomized) strategy
38. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Barrier to entry
Tacit collusion
Oligopoly
Lerner index
39. The exclusive right to a product for a period of 20 years from the date the product is invented
Perfect Competitor Characteristics
Secure strategy
Patent
Inefficiency
40. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Kinked-demand curve
Nash equilibrium
Imperfect competition
Follower
41. Using advertising and other means to try to increase a firm's sales
Non-price competition
Monopolistic Competition
Double marginalization
Dominant firm oligopoly
42. In game theory - benefit obtained by party that moves first in a sequential game
Conglomerate Merger
First-mover advantage
Finding profit for oligopoly games
Third-Degree Price Discrimination
43. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Rent-seeking behavior
Perfect Competition Long Run Supply
Duopoly
Brand Multiplication
44. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Peak-load pricing
Empty threat
Competitive market
Open Collusion
45. A strategy that guarantees the highest payoff given the worst possible scenario
Price matching
Secure strategy
Payoff matrix
Socially optimal price
46. If production of a good requires a particular input - then control of that input can be a barrier to entry
Trigger strategy
Ownership of a Key Input
Business strategy
Fair return price
47. Single firm is sole producer of a product for which there are no close substitutes
Payoff matrix
Maximizing profit in Oligopoly games
Limit pricing
Pure monopoly
48. 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
The Threat from Potential Entrants Firms
Nash equilibrium
Concentration Ratio
Mixed (randomized) strategy
49. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Double marginalization
Competitive market
One-shot game
Unbalanced Oligopoly
50. The practice of bundling several different products together and selling them at a single "bundle" price
Two-part pricing
Commodity bundling
Normal-form game
Indefinitely repeated game