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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 something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Strategy
Sequential-move game
Payoff
Non-rivalrous consumption
2. Demand line is above ATC curve
Sweezy oligopoly
Perfect Competitor Making a Profit
Trigger strategy
Monopoly (characteristics)
3. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Limit pricing
Perfect Competition (characteristics)
Perfect Competitor Characteristics
Perfect Competition Short Run Supply
4. Produce identical products
Prisoners' dilemma
Perfect Competitor Characteristics
Bertrand oligopoly
Minimum efficient scale (full capacity)
5. Rival who sets its output after the leader (Stackelberg's model)
Common knowledge
Follower
Limit pricing
Rent-seeking behavior
6. The practice of bundling several different products together and selling them at a single "bundle" price
Commodity bundling
Cutthroat Competition
Cournot equilibrium
Minimum efficient scale (full capacity)
7. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Prisoners' dilemma
Kinked demand curve model
Unbalanced Oligopoly
8. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Simultaneous consumption
Product Differentiation
Bargaining Power of Suppliers
Duopoly
9. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Patent
Dominant strategy equilibrium
Third-degree price discrimination
Concentration Ratio
10. A simpler way to operationalize first-degree price discrimination
Duopoly
Two-part Tariff Method of Pricing
Double marginalization
Examples of Monopolistic Competition
11. A situation in which no one wants to change his or her behavior
Pure monopoly
Equilibrium
Patent
Perfect Competition (characteristics)
12. 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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13. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
First-mover advantage
Nonprime competition
Commodity bundling
Herfindahl-Hirschman index (HHI)
14. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Dominant strategy
Interdependence
Market
Primary Sources of Monopolistic Power
15. 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
The Threat from Potential Entrants Firms
Two-part pricing
Limit pricing
16. Takes Place inside the Mind of the consumer
Duopoly
No cooperative equilibrium
Price Leadership
Product Differentiation
17. 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
Homogenous oligopoly
Perfect Competition Short Run Supply
Conglomerate Merger
Joint Venture
18. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase
Kinked-demand curve
Double marginalization
Perfect Competitor Characteristics
Contestable market
19. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Empty threat
Two-part pricing
Second-Degree Price Discrimination
Concentration Ratio
20. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Covert Collusion
Secure strategy
Limit price
21. First firm to set its output (Stackelberg's model)
Cooperation
Tit-for-tat strategy
Leader
Cutthroat Competition
22. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Price discrimination
Sequential game
Third-Degree Price Discrimination
Rent-seeking behavior
23. 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
Business strategy
Limit pricing
Third-Degree Price Discrimination
24. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Implicit Collusion
Homogenous oligopoly
Perfect Competitor Characteristics
Undifferentiated
25. Price Sensitive
Unbalanced Oligopoly
Disappearing invisible hand
Perfect Competition Long Run Supply
High Price Elasticity
26. Both players have dominant strategies and play them
Dominant strategy equilibrium
Common knowledge
Secure strategy
Reservation Price
27. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Price war
Lerner index
Nonprime competition
Simultaneous decision games
28. Increases in the value of a product to each user - including existing users - as the total number of users rises
Homogenous oligopoly
Network effects
Payoff matrix
Price war
29. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Contestable market
Examples of Monopolistic Competition
Price Leadership
Cooperation
30. 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
Market
Product differentiation
Credible threat
Two-part pricing
31. 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)
Cournot oligopoly
Strategic behavior
Barrier to entry
Fair return price
32. The reward received by a player in a game - such as the profit earned by an oligopolist
Examples of Oligopoly
Stackelberg oligopoly
Cheating
Payoff
33. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
Perfect Competition (characteristics)
Repeated game
Normal-form game
34. The smallest quantity at which the average cost curve reaches its minimum
Economies of scale
Conglomerate Merger
Minimum efficient scale (full capacity)
Natural Monopoly (local phone or electric company)
35. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Market
What is game?
Indefinitely repeated game
36. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Ownership of a Key Input
Rent-seeking behavior
Horizontal Merger/Integration
Imperfect competition
37. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Limit pricing
Joint Venture
Finding profit for oligopoly games
Reservation Price
38. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Limit pricing
Concentration Ratio
Leader
Bargaining Power of Buyers
39. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Normal-form game
Undifferentiated
Credible threat
Tacit collusion
40. 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
Simultaneous-move game
Price Leadership
Fair return price
41. The derivative of total revenue
Import competition
Tit-for-tat strategy
Sweezy oligopoly
Marginal Revenue
42. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Finding profit for oligopoly games
Collusion
Horizontal Merger/Integration
Duopoly
43. A strategy that guarantees the highest payoff given the worst possible scenario
Secure strategy
Prisoner's dilemma
Herfindahl-Hirschman index (HHI)
Covert Collusion
44. Game in which each player makes decisions without knowledge of the other player's decisions
Simultaneous-move game
Profit
Inter-industry competition
Minimum efficient scale (full capacity)
45. Variations on one good so that a firm can increase market sharea
Brand Multiplication
Monopolistic Characteristics:
One-shot game
Sequential game
46. Identical or substitutable
Randomized pricing
Repeated game
Peak-load pricing
Undifferentiated
47. 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
Monopolistic Competition
Mutual interdependence
Reservation Price
48. 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
Cutthroat Competition
Simultaneous-move game
Payoff table
Cooperative equilibrium
49. A strategy or action that always provides the best outcome no matter what decisions rivals make
Equilibrium
Network effects
Peak-load pricing
Dominant strategy
50. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Limit price
Payoff matrix
Two-part pricing
Imperfect competition