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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. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Kinked demand curve model
Tacit collusion
Dansby-Willig performance index
Marginal Revenue
2. 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
Finding profit for oligopoly games
Third-degree price discrimination
Simultaneous consumption
Cournot equilibrium
3. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Cooperative equilibrium
Payoff
Collusion
Leader
4. 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
Covert Collusion
Inter-industry competition
Double marginalization
Kinked-demand curve
5. A firm whose price decisions are tacitly accepted and followed by others in the industry
Cutthroat Competition
Price Leadership
Third-degree price discrimination
Cournot oligopoly
6. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Price war
Monopolistic Characteristics:
Stackelberg oligopoly
Indefinitely repeated game
7. Variations on one good so that a firm can increase market sharea
Dansby-Willig performance index
Profit
Herfindahl-Hirschman index (HHI)
Brand Multiplication
8. Produce identical products
First-Degree Price Discrimination (Perfect)
Trigger strategy
Subgame perfect equilibrium
Perfect Competitor Characteristics
9. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Payoff matrix
Pure monopoly
Inefficiency
Sweezy oligopoly
10. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Fair return price
First-mover advantage
Primary Sources of Monopolistic Power
Present Value (PV)
11. 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
Two-part pricing
Tacit collusion
Bertrand oligopoly
Empty threat
12. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Herfindahl-Hirschman index (HHI)
Import competition
Imperfect competition
Cooperation
13. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Price matching
Market
Tacit collusion
Bargaining Power of Suppliers
14. The physical characteristics of the market within which firms interact
Market Structure
Lerner index
Patent
Finding profit for oligopoly games
15. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Tacit collusion
Open Collusion
Basis for Product Differentiation
Cross-subsidy pricing
16. 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
Trigger strategy
Peak-load pricing
Transfer pricing
Reservation Price
17. A simpler way to operationalize first-degree price discrimination
Joint Venture
Unbalanced Oligopoly
Monopoly (characteristics)
Two-part Tariff Method of Pricing
18. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
Simultaneous decision games
Mixed (randomized) strategy
Limit pricing
19. In game theory - a game that is played again sometime after the previous game ends
Repeated game
Tit-for-tat strategy
Examples of Oligopoly
Non-cooperative behavior
20. 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
Subgame perfect equilibrium
Dominant strategy
Leader
21. Both players have dominant strategies and play them
Secure strategy
Network effects
Dominant strategy equilibrium
Second-Degree Price Discrimination
22. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Two-part Tariff Method of Pricing
First-mover advantage
Second-Degree Price Discrimination
23. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Limit pricing
Tacit collusion
Covert Collusion
Prisoner's dilemma
24. 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.)
Undifferentiated
Dominant firm oligopoly
No cooperative equilibrium
Monopolistic Characteristics:
25. A situation in which a change in price strategy by one firm affects sales and profits of another
Kinked demand curve model
Mutual interdependence
Vertical Merger
Common knowledge
26. Single firm is sole producer of a product for which there are no close substitutes
Sequential-move game
One-shot game
Market
Pure monopoly
27. Takes Place inside the Mind of the consumer
Four-firm concentration ratio
Product Differentiation
Payoff
Cheating
28. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Inefficiency
Profit
Dansby-Willig performance index
Simultaneous decision games
29. A situation in which no one wants to change his or her behavior
Equilibrium
Empty threat
Payoff matrix
Inefficiency
30. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Tit-for-tat strategy
Mutual Interdependence
Mixed (randomized) strategy
Profit
31. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist
Non-rivalrous consumption
Cooperation
Sweezy oligopoly
Maximizing profit in Oligopoly games
32. 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
Socially optimal price
Monopoly (characteristics)
Market
Inter-industry competition
33. A strategy or action that always provides the best outcome no matter what decisions rivals make
Leader
Herfindahl-Hirschman index (HHI)
Unbalanced Oligopoly
Dominant strategy
34. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them
Cooperative equilibrium
Unbalanced Oligopoly
Simultaneous consumption
Mutual Interdependence
35. The competition for sales between the products of one industry and the products of another industry
Normal-form game
Ownership of a Key Input
Inter-industry competition
Common knowledge
36. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Strategic behavior
Herfindahl-Hirschman index (HHI)
Rent-seeking behavior
Kinked demand curve model
37. Rules - strategies - payoffs - outcomes
Double marginalization
Prisoners' dilemma
What is game?
Randomized pricing
38. An equilibrium in a game in which players cooperate to increase their mutual payoff
Maximizing profit in Oligopoly games
Covert Collusion
Normal-form game
Cooperative equilibrium
39. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Double marginalization
Unbalanced Oligopoly
Mutual interdependence
Price war
40. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Undifferentiated
Basis for Product Differentiation
Unbalanced Oligopoly
Examples of Oligopoly
41. 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
Vertical Merger
Dominant firm oligopoly
Ownership of a Key Input
Dansby-Willig performance index
42. Marginal cost curve above average variable cost - P* = SRMC
Nash equilibrium
Sequential-move game
Perfect Competition Short Run Supply
Collusion
43. 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
Dominant firm oligopoly
Strategic behavior
Interdependence
Joint Venture
44. Toothpaste - shampoo - restaurants - banks
Examples of Monopolistic Competition
Common knowledge
Empty threat
Mixed (randomized) strategy
45. Price Sensitive
Payoff matrix
Product Differentiation
High Price Elasticity
Limit pricing
46. Face competition from companies that currently are not in the market but might enter
Network effects
Concentration Ratio
First-mover advantage
The Threat from Potential Entrants Firms
47. The reward received by a player in a game - such as the profit earned by an oligopolist
Lerner index
Third-Degree Price Discrimination
Trigger strategy
Payoff
48. 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"
Credible threat
Mixed (randomized) strategy
Economies of scale
Non-cooperative equilibrium
49. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
No cooperative equilibrium
Mutual Interdependence
Limit pricing
Cross-subsidy pricing
50. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Commodity bundling
Mixed (randomized) strategy
Monopoly (characteristics)