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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 representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies
Rothschild index
Kinked-demand curve
Extensive-form game
Inter-industry competition
2. 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
Pure monopoly
Payoff matrix
Cournot oligopoly
Limit pricing
3. 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
Double marginalization
Cooperative equilibrium
Simultaneous-move game
Socially optimal price
4. Revenue-Costs
Profit
Cooperative equilibrium
Product differentiation
Implicit Collusion
5. A strategy or action that always provides the best outcome no matter what decisions rivals make
Bertrand oligopoly
Four-firm concentration ratio
Dominant strategy
Cutthroat Competition
6. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Imperfect competition
Non-rivalrous consumption
Common knowledge
Natural Monopoly (local phone or electric company)
7. An oligopoly in which the firms produce a standardized product
Trigger strategy
Sequential game
Marginal Revenue
Homogenous oligopoly
8. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Perfect Competition Long Run Supply
Payoff matrix
Randomized pricing
Indefinitely repeated game
9. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Patent
No cooperative equilibrium
Stackelberg oligopoly
Primary Sources of Monopolistic Power
10. The situation when a firm's long-run average costs fall as it increases output
Price war
Transfer pricing
Economies of scale
Brand Multiplication
11. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Nash equilibrium
Second-Degree Price Discrimination
Fair return price
Monopolistic Competition
12. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Implicit Collusion
Leader
Tacit collusion
13. 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
Kinked-demand curve
Equilibrium
Bertrand oligopoly
Interdependence
14. First firm to set its output (Stackelberg's model)
Unbalanced Oligopoly
Leader
Pure monopoly
Non-cooperative behavior
15. The practice of bundling several different products together and selling them at a single "bundle" price
Commodity bundling
Perfect Competition Long Run Supply
Competitive market
Cournot equilibrium
16. In game theory - a game that is played again sometime after the previous game ends
Imperfect competition
First-Degree Price Discrimination (Perfect)
Sequential game
Repeated game
17. All firms and individuals willing and able to buy or sell a particular product
Market
Network effects
Fair return price
Rothschild index
18. 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
Indefinitely repeated game
Cournot equilibrium
Finding profit for oligopoly games
Cournot oligopoly
19. Toothpaste - shampoo - restaurants - banks
Examples of Monopolistic Competition
Market
Price discrimination
Perfect Competition (characteristics)
20. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Bertrand oligopoly
Indefinitely repeated game
No cooperative equilibrium
Payoff matrix
21. Actions taken by a firm to achieve a goal - such as maximizing profits
Market Structure
First-mover advantage
Business strategy
Competitive market
22. Takes Place inside the Mind of the consumer
Product Differentiation
Lerner index
Kinked-demand curve
Tacit collusion
23. Ignoring the effects of their actions on each others' profits
Second-Degree Price Discrimination
Oligopoly
Commodity bundling
Non-cooperative behavior
24. The practice of charging different prices to consumers for the same good or service
Credible threat
Price discrimination
Bargaining Power of Suppliers
Socially optimal price
25. 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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26. Actions taken by firms to plan for and react to competition from rival firms
Sequential-move game
Leader
Collusion
Strategic behavior
27. 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
Non-price competition
Concentration Ratio
Finding profit for oligopoly games
Horizontal Merger/Integration
28. 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
High Price Elasticity
Trigger strategy
Non-cooperative equilibrium
Nonprime competition
29. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef
Rothschild index
Price discrimination
Dominant strategy
Open Collusion
30. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Perfect Competition (characteristics)
Socially optimal price
Third-Degree Price Discrimination
Profit
31. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Ownership of a Key Input
Open Collusion
Block pricing
Credible threat
32. If production of a good requires a particular input - then control of that input can be a barrier to entry
Block pricing
Ownership of a Key Input
Inefficiency
Cournot oligopoly
33. The competition that domestic firms encounter from the products and services of foreign producers
Homogenous oligopoly
First-Degree Price Discrimination (Perfect)
Import competition
Monopolistic Competition
34. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Credible threat
Economies of scale
Monopolistic Characteristics:
Normal-form game
35. 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
What is game?
Simultaneous decision games
Trigger strategy
Dominant firm oligopoly
36. 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
Limit pricing
Payoff matrix
Two-part pricing
High Price Elasticity
37. 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
Undifferentiated
Third-Degree Price Discrimination
Finding profit for oligopoly games
Trigger strategy
38. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
First-mover advantage
Simultaneous decision games
Price war
Monopolistic Characteristics:
39. Identical or substitutable
Simultaneous decision games
Cutthroat Competition
Transfer pricing
Undifferentiated
40. A few firms produce most market output - Products may or may not be differentiated - Effective entry barriers protect firm profitability - Firm interdependence requires strategic thinking
Oligopoly
Second-Degree Price Discrimination
Strategy
Monopolistic Characteristics:
41. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Dominant firm oligopoly
Normal-form game
Perfect Competition Barriers to Entry
Basis for Product Differentiation
42. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
One-shot game
Present Value (PV)
Reservation Price
Normal-form game
43. Game in which one player makes a move after observing the other player's move
Sequential-move game
Inefficiency
Cournot equilibrium
Network effects
44. 1/(1+i)n
Present Value (PV)
Cheating
Transfer pricing
Limit pricing
45. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Implicit Collusion
Rothschild index
Price matching
Cournot oligopoly
46. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
The Threat from Potential Entrants Firms
Nonprime competition
Indefinitely repeated game
Payoff table
47. Produce identical products
Marginal Revenue
Subgame perfect equilibrium
Trigger strategy
Perfect Competitor Characteristics
48. 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
First-Degree Price Discrimination (Perfect)
Simultaneous consumption
Contestable market
49. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Primary Sources of Monopolistic Power
The Threat from Potential Entrants Firms
One-shot game
50. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Equilibrium
Implicit Collusion
Price discrimination
Herfindahl-Hirschman index (HHI)