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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. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Brand Multiplication
Bargaining Power of Suppliers
Basis for Product Differentiation
Prisoner's dilemma
2. 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
Bertrand oligopoly
Dominant strategy
Disappearing invisible hand
Product differentiation
3. Game in which each player makes decisions without knowledge of the other player's decisions
Perfect Competitor Making a Profit
Normal-form game
Simultaneous-move game
Perfect Competitor Characteristics
4. The practice of bundling several different products together and selling them at a single "bundle" price
Credible threat
Perfect Competition Short Run Supply
Commodity bundling
Oligopoly
5. Variations on one good so that a firm can increase market sharea
Second-Degree Price Discrimination
Normal-form game
Rothschild index
Brand Multiplication
6. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Vertical Merger
Mixed (randomized) strategy
Cooperation
Joint Venture
7. 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
Perfect Competitor Characteristics
Finding profit for oligopoly games
Secure strategy
Natural Monopoly (local phone or electric company)
8. The reward received by a player in a game - such as the profit earned by an oligopolist
Payoff
Bargaining Power of Suppliers
Perfect Competition Short Run Supply
Non-rivalrous consumption
9. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Peak-load pricing
Dominant firm oligopoly
Collusion
Leader
10. In game theory - benefit obtained by party that moves first in a sequential game
Payoff matrix
First-mover advantage
Perfect Competition Barriers to Entry
Mutual Interdependence
11. 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
Fair return price
Mutual Interdependence
Lerner index
Strategic behavior
12. Cooperation among firms that does not involve an explicit agreement
Merger
Tacit collusion
Perfect Competitor Making a Profit
Monopolistic Characteristics:
13. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Perfect Competition Barriers to Entry
Perfect Competition (characteristics)
Four-firm concentration ratio
Lerner index
14. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Indefinitely repeated game
Cournot equilibrium
Dansby-Willig performance index
Import competition
15. Marginal cost curve above average variable cost - P* = SRMC
Patent
Payoff matrix
Indefinitely repeated game
Perfect Competition Short Run Supply
16. A firm whose price decisions are tacitly accepted and followed by others in the industry
Prisoners' dilemma
Rent-seeking behavior
Price Leadership
Dominant strategy equilibrium
17. 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
Minimum efficient scale (full capacity)
Peak-load pricing
Simultaneous decision games
Bargaining Power of Suppliers
18. 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
Bertrand oligopoly
Rothschild index
Dominant strategy equilibrium
Tacit collusion
19. Involves price-fixing
Finding profit for oligopoly games
Marginal Revenue
First-Degree Price Discrimination (Perfect)
Covert Collusion
20. 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
Cutthroat Competition
Oligopoly
Competitive market
Rent-seeking behavior
21. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Leader
Prisoner's dilemma
Fair return price
Empty threat
22. A situation in which neither firm has incentive to change its output given the other firm's output
Bargaining Power of Suppliers
Peak-load pricing
Cournot equilibrium
Block pricing
23. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Payoff table
Competitive market
Examples of Monopolistic Competition
24. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Monopolistic Characteristics:
Inefficiency
Perfect Competitor Characteristics
25. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
One-shot game
Homogenous oligopoly
Herfindahl-Hirschman index (HHI)
Perfect Competitor Making a Profit
26. In game theory - a decision rule that describes the actions a player will take at each decision point
Mutual Interdependence
Indefinitely repeated game
Strategy
First-mover advantage
27. Actions taken by firms to plan for and react to competition from rival firms
Undifferentiated
Oligopoly
Mutual interdependence
Strategic behavior
28. Toothpaste - shampoo - restaurants - banks
Strategy
Prisoners' dilemma
Ownership of a Key Input
Examples of Monopolistic Competition
29. A strategy that guarantees the highest payoff given the worst possible scenario
Simultaneous decision games
Secure strategy
Implicit Collusion
Finding profit for oligopoly games
30. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Inefficiency
Perfect Competitor Characteristics
Lerner index
Second-Degree Price Discrimination
31. In game theory - a game that is played again sometime after the previous game ends
Present Value (PV)
Repeated game
Examples of Monopolistic Competition
No cooperative equilibrium
32. 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
Cooperation
Extensive-form game
Competitive market
Perfect Competition (characteristics)
33. Specific assets - Economies of scale - Excess capacity - Reputation effects
Homogenous oligopoly
Non-cooperative equilibrium
Perfect Competition Barriers to Entry
Price discrimination
34. The price that is low enough to deter entry
Dominant firm oligopoly
Rothschild index
First-Degree Price Discrimination (Perfect)
Limit price
35. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Empty threat
Perfect Competitor Making a Profit
Implicit Collusion
Sweezy oligopoly
36. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Payoff matrix
Product Differentiation
Tit-for-tat strategy
Perfect Competitor Making a Profit
37. If production of a good requires a particular input - then control of that input can be a barrier to entry
Ownership of a Key Input
Block pricing
Perfect Competitor Characteristics
Product differentiation
38. First firm to set its output (Stackelberg's model)
Monopolistic Competition
Leader
Common knowledge
Dominant firm oligopoly
39. Produce identical products
Imperfect competition
Perfect Competitor Characteristics
Product differentiation
Mutual interdependence
40. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Commodity bundling
Reservation Price
Bertrand oligopoly
Duopoly
41. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Two-part Tariff Method of Pricing
Non-rivalrous consumption
Undifferentiated
Collusion
42. 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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43. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Disappearing invisible hand
Profit
Barrier to entry
Limit pricing
44. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m
Competitive market
Cooperation
Product Differentiation
Equilibrium
45. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Economies of scale
Natural Monopoly (local phone or electric company)
Dansby-Willig performance index
What is game?
46. The situation when a firm's long-run average costs fall as it increases output
Economies of scale
Contestable market
Second-Degree Price Discrimination
Open Collusion
47. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Monopolistic Competition
Price matching
Pure monopoly
Sequential game
48. A condition describing a set of strategies that constitutes a Nash equilibrium and allows no player to improve their own payoff at any stage of the game by changing strategies
Subgame perfect equilibrium
Empty threat
Peak-load pricing
Normal-form game
49. 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
Nash equilibrium
Primary Sources of Monopolistic Power
Simultaneous decision games
Concentration Ratio
50. A situation in which no one wants to change his or her behavior
Joint Venture
Stackelberg oligopoly
Equilibrium
Conglomerate Merger