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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 table that shows the payoffs for every possible action by each player for every possible action by the other player
Sequential-move game
Joint Venture
Import competition
Payoff matrix
2. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Bargaining Power of Suppliers
Import competition
Fair return price
Payoff table
3. Maximize economic profit by producing the quantity at which MC=MR
Minimum efficient scale (full capacity)
Socially optimal price
Maximizing profit in Oligopoly games
Leader
4. Game in which one player makes a move after observing the other player's move
Perfect Competition Short Run Supply
Non-cooperative equilibrium
Cooperative equilibrium
Sequential-move game
5. A firm whose price decisions are tacitly accepted and followed by others in the industry
Price Leadership
Commodity bundling
Sequential game
Prisoners' dilemma
6. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Rent-seeking behavior
Implicit Collusion
Sequential-move game
No cooperative equilibrium
7. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Third-Degree Price Discrimination
Import competition
Price war
Tit-for-tat strategy
8. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits
Collusion
Monopolistic Competition
Follower
Profit
9. Ignoring the effects of their actions on each others' profits
Cutthroat Competition
Indefinitely repeated game
Prisoner's dilemma
Non-cooperative behavior
10. 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
Interdependence
Dominant strategy equilibrium
Double marginalization
Disappearing invisible hand
11. A situation in which neither firm has incentive to change its output given the other firm's output
Cournot equilibrium
Brand Multiplication
Inter-industry competition
Minimum efficient scale (full capacity)
12. 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
Dominant strategy
Patent
Dominant firm oligopoly
Vertical Merger
13. An equilibrium in a game in which players cooperate to increase their mutual payoff
Non-rivalrous consumption
Present Value (PV)
Prisoner's dilemma
Cooperative equilibrium
14. An oligopoly in which the firms produce a differentiated product
Non-cooperative behavior
Differentiated oligopoly
Kinked demand curve model
Price Leadership
15. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Lerner index
Natural Monopoly (local phone or electric company)
Inefficiency
Network effects
16. The competition that domestic firms encounter from the products and services of foreign producers
Cournot oligopoly
Import competition
Credible threat
Imperfect competition
17. A situation in which no one wants to change his or her behavior
Sequential game
Limit pricing
Equilibrium
Dominant strategy
18. 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)
Strategic behavior
Rothschild index
Stackelberg oligopoly
Mutual Interdependence
19. Rules - strategies - payoffs - outcomes
Minimum efficient scale (full capacity)
What is game?
Tit-for-tat strategy
Horizontal Merger/Integration
20. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Primary Sources of Monopolistic Power
Non-cooperative equilibrium
Bargaining Power of Buyers
Sequential game
21. The reward received by a player in a game - such as the profit earned by an oligopolist
Payoff
Cournot oligopoly
Conglomerate Merger
Contestable market
22. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Product Differentiation
Vertical Merger
Simultaneous decision games
23. 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
Bargaining Power of Suppliers
Double marginalization
Product Differentiation
Cutthroat Competition
24. The practice of charging different prices to consumers for the same good or service
Double marginalization
Examples of Monopolistic Competition
Price discrimination
Product Differentiation
25. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Bertrand oligopoly
Dansby-Willig performance index
Randomized pricing
Perfect Competitor Characteristics
26. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
What is game?
Patent
Concentration Ratio
Price Leadership
27. Actions taken by a firm to achieve a goal - such as maximizing profits
Non-price competition
Business strategy
Stackelberg oligopoly
Cooperative equilibrium
28. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
No cooperative equilibrium
Market Structure
Dansby-Willig performance index
Two-part Tariff Method of Pricing
29. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Horizontal Merger/Integration
Cutthroat Competition
Limit price
Repeated game
30. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Block pricing
Common knowledge
High Price Elasticity
Network effects
31. A market in which: (1) all have access to the same technology; (2) consumers respond quickly to price changes; (3) existing firms cannot respond quickly to entry by lowering their prices; and (4) there are no sunk costs
Competitive market
Non-cooperative equilibrium
Contestable market
Equilibrium
32. 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
Kinked-demand curve
Rothschild index
First-Degree Price Discrimination (Perfect)
Cournot oligopoly
33. The exclusive right to a product for a period of 20 years from the date the product is invented
Present Value (PV)
Patent
Examples of Oligopoly
Secure strategy
34. All firms and individuals willing and able to buy or sell a particular product
Market
Cross-subsidy pricing
Transfer pricing
Stackelberg oligopoly
35. 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
Horizontal Merger/Integration
Double marginalization
Marginal Revenue
Nash equilibrium
36. A situation in which a change in price strategy by one firm affects sales and profits of another
Mutual interdependence
Tacit collusion
Kinked demand curve model
Limit pricing
37. Marginal cost curve above average variable cost - P* = SRMC
Monopolistic Characteristics:
Undifferentiated
Perfect Competition Short Run Supply
Empty threat
38. Toothpaste - shampoo - restaurants - banks
Cross-subsidy pricing
Nash equilibrium
High Price Elasticity
Examples of Monopolistic Competition
39. A strategy or action that always provides the best outcome no matter what decisions rivals make
Dominant strategy
Perfect Competitor Characteristics
Payoff
Prisoner's dilemma
40. Variations on one good so that a firm can increase market sharea
Brand Multiplication
Perfect Competitor Characteristics
Repeated game
Third-Degree Price Discrimination
41. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
One-shot game
Four-firm concentration ratio
Product differentiation
High Price Elasticity
42. Produce identical products
Follower
Subgame perfect equilibrium
Perfect Competitor Characteristics
Merger
43. If production of a good requires a particular input - then control of that input can be a barrier to entry
Interdependence
Ownership of a Key Input
Payoff
Monopolistic Characteristics:
44. Takes Place inside the Mind of the consumer
Follower
Bargaining Power of Suppliers
Product Differentiation
Examples of Oligopoly
45. The practice of bundling several different products together and selling them at a single "bundle" price
Present Value (PV)
Examples of Oligopoly
Commodity bundling
Simultaneous-move game
46. 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
Collusion
Payoff table
Marginal Revenue
Oligopoly
47. In game theory - benefit obtained by party that moves first in a sequential game
Cutthroat Competition
First-mover advantage
Interdependence
Mutual interdependence
48. An oligopoly in which the firms produce a standardized product
Homogenous oligopoly
Dominant firm oligopoly
Monopolistic Competition
Stackelberg oligopoly
49. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Market Structure
Transfer pricing
Perfect Competition Long Run Supply
50. 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
Perfect Competitor Characteristics
Strategy
Price matching
Kinked demand curve model