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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. When a manager makes a noncooperative decision
Cheating
Two-part Tariff Method of Pricing
Inter-industry competition
Strategic behavior
2. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Perfect Competition Short Run Supply
Dansby-Willig performance index
Inter-industry competition
Inefficiency
3. Involves price-fixing
Cross-subsidy pricing
Homogenous oligopoly
Covert Collusion
Third-Degree Price Discrimination
4. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Two-part Tariff Method of Pricing
Kinked-demand curve
Price war
Indefinitely repeated game
5. The reward received by a player in a game - such as the profit earned by an oligopolist
No cooperative equilibrium
Payoff
Stackelberg oligopoly
Price war
6. An equilibrium in a game in which players cooperate to increase their mutual payoff
Monopoly (characteristics)
One-shot game
Rent-seeking behavior
Cooperative equilibrium
7. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Conglomerate Merger
Rent-seeking behavior
Brand Multiplication
Duopoly
8. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike
Randomized pricing
Reservation Price
Price matching
Kinked demand curve model
9. Face competition from companies that currently are not in the market but might enter
Bertrand oligopoly
Simultaneous consumption
Cheating
The Threat from Potential Entrants Firms
10. 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)
Prisoner's dilemma
Tacit collusion
Inefficiency
Barrier to entry
11. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Conglomerate Merger
Double marginalization
Vertical Merger
Perfect Competition Long Run Supply
12. Increases in the value of a product to each user - including existing users - as the total number of users rises
Normal-form game
Joint Venture
Network effects
Minimum efficient scale (full capacity)
13. Using advertising and other means to try to increase a firm's sales
Second-Degree Price Discrimination
Implicit Collusion
Non-price competition
Market Structure
14. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Cross-subsidy pricing
Mixed (randomized) strategy
Unbalanced Oligopoly
Simultaneous consumption
15. Actions taken by firms to plan for and react to competition from rival firms
Strategic behavior
Differentiated oligopoly
Simultaneous-move game
Two-part Tariff Method of Pricing
16. Ignoring the effects of their actions on each others' profits
Dominant strategy equilibrium
Conglomerate Merger
Two-part pricing
Non-cooperative behavior
17. Revenue-Costs
Maximizing profit in Oligopoly games
Limit price
Simultaneous-move game
Profit
18. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Bargaining Power of Buyers
Third-degree price discrimination
Collusion
Cournot equilibrium
19. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
First-Degree Price Discrimination (Perfect)
Normal-form game
Nash equilibrium
Perfect Competition Barriers to Entry
20. Steel - autos - colas - airlines
Business strategy
Peak-load pricing
Secure strategy
Examples of Oligopoly
21. Industry in which (1) there are few firms serving many customers; (2) firms produce either differentiated or homogenous products; (3) a single (leader) firm chooses an output quantity before their rivals select their outputs; (4) all other (follower)
Stackelberg oligopoly
What is game?
Non-cooperative behavior
Strategic behavior
22. In game theory - a game that is played again sometime after the previous game ends
Concentration Ratio
Disappearing invisible hand
Second-Degree Price Discrimination
Repeated game
23. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Kinked-demand curve
Perfect Competition (characteristics)
Present Value (PV)
Basis for Product Differentiation
24. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Covert Collusion
Transfer pricing
Repeated game
Implicit Collusion
25. Simultaneous move game that is not repeated
One-shot game
High Price Elasticity
Tacit collusion
Prisoner's dilemma
26. 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
Equilibrium
Cournot oligopoly
Dansby-Willig performance index
Third-degree price discrimination
27. Game in which each player makes decisions without knowledge of the other player's decisions
Dominant strategy
Herfindahl-Hirschman index (HHI)
Limit price
Simultaneous-move game
28. The practice of charging different prices to consumers for the same good or service
Price discrimination
Examples of Oligopoly
Prisoners' dilemma
Cooperative equilibrium
29. 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
Disappearing invisible hand
Brand Multiplication
Kinked demand curve model
Mutual Interdependence
30. Price Sensitive
Simultaneous decision games
High Price Elasticity
Open Collusion
Profit
31. Marginal cost curve above average variable cost - P* = SRMC
Minimum efficient scale (full capacity)
Inter-industry competition
Socially optimal price
Perfect Competition Short Run Supply
32. When the decisions of two or more firms significantly affect each others' profits
Interdependence
Limit pricing
Prisoners' dilemma
Sequential-move game
33. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Tacit collusion
Unbalanced Oligopoly
Open Collusion
Disappearing invisible hand
34. The derivative of total revenue
Strategy
Joint Venture
Marginal Revenue
Network effects
35. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Empty threat
Differentiated oligopoly
Stackelberg oligopoly
36. The price that is low enough to deter entry
Limit price
First-Degree Price Discrimination (Perfect)
Two-part Tariff Method of Pricing
Duopoly
37. 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
Cournot oligopoly
Payoff matrix
Nash equilibrium
Product Differentiation
38. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Third-Degree Price Discrimination
Transfer pricing
Mixed (randomized) strategy
Tit-for-tat strategy
39. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Undifferentiated
Product differentiation
Open Collusion
Differentiated oligopoly
40. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor
Lerner index
Price matching
Mutual interdependence
Second-Degree Price Discrimination
41. A situation in which neither firm has incentive to change its output given the other firm's output
Network effects
Cooperative equilibrium
Maximizing profit in Oligopoly games
Cournot equilibrium
42. All firms and individuals willing and able to buy or sell a particular product
Market
Perfect Competitor Characteristics
Repeated game
Vertical Merger
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
Sequential-move game
Limit pricing
Common knowledge
Joint Venture
44. 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
Kinked demand curve model
Kinked-demand curve
Limit pricing
Maximizing profit in Oligopoly games
45. A situation in which no one wants to change his or her behavior
Price matching
Dansby-Willig performance index
Rothschild index
Equilibrium
46. A simpler way to operationalize first-degree price discrimination
First-Degree Price Discrimination (Perfect)
Two-part Tariff Method of Pricing
Rothschild index
Equilibrium
47. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Unbalanced Oligopoly
Credible threat
Reservation Price
Non-cooperative behavior
48. 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
Concentration Ratio
Import competition
Price discrimination
Block pricing
49. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Price war
Bertrand oligopoly
Bargaining Power of Suppliers
50. Actions taken by a firm to achieve a goal - such as maximizing profits
Business strategy
One-shot game
Dominant firm oligopoly
Covert Collusion