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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. The competition for sales between the products of one industry and the products of another industry
Inter-industry competition
Perfect Competition Barriers to Entry
Two-part Tariff Method of Pricing
Cutthroat Competition
2. 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
Pure monopoly
Concentration Ratio
Kinked-demand curve
Cournot equilibrium
3. 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
Bargaining Power of Suppliers
Two-part Tariff Method of Pricing
Monopolistic Competition
Bertrand oligopoly
4. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist
Sweezy oligopoly
Empty threat
Finding profit for oligopoly games
Indefinitely repeated game
5. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Cross-subsidy pricing
Open Collusion
Natural Monopoly (local phone or electric company)
Unbalanced Oligopoly
6. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Duopoly
Present Value (PV)
Finding profit for oligopoly games
Product differentiation
7. Involves price-fixing
Perfect Competitor Characteristics
Covert Collusion
Monopolistic Competition
Cooperation
8. When a manager makes a noncooperative decision
Subgame perfect equilibrium
Monopoly (characteristics)
Cheating
Monopolistic Competition
9. Produce identical products
Collusion
Payoff matrix
Peak-load pricing
Perfect Competitor Characteristics
10. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Mutual interdependence
Leader
Fair return price
What is game?
11. The situation when a firm's long-run average costs fall as it increases output
Payoff matrix
Monopolistic Competition
Economies of scale
Limit pricing
12. 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
Examples of Monopolistic Competition
Finding profit for oligopoly games
Peak-load pricing
Limit pricing
13. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Duopoly
Cooperation
Oligopoly
Product differentiation
14. Cooperation among firms that does not involve an explicit agreement
Patent
Leader
Tacit collusion
Marginal Revenue
15. 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
Two-part pricing
Monopolistic Competition
Product differentiation
16. 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
Dansby-Willig performance index
Third-Degree Price Discrimination
Perfect Competition Long Run Supply
Joint Venture
17. Ignoring the effects of their actions on each others' profits
Tacit collusion
Perfect Competition Short Run Supply
Non-cooperative behavior
Import competition
18. The physical characteristics of the market within which firms interact
Product differentiation
Sequential game
Perfect Competition (characteristics)
Market Structure
19. The smallest quantity at which the average cost curve reaches its minimum
Minimum efficient scale (full capacity)
Dominant strategy equilibrium
Import competition
Stackelberg oligopoly
20. Maximize economic profit by producing the quantity at which MC=MR
Maximizing profit in Oligopoly games
Follower
Peak-load pricing
No cooperative equilibrium
21. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Perfect Competition (characteristics)
Minimum efficient scale (full capacity)
Third-Degree Price Discrimination
Monopolistic Competition
22. In game theory - a decision rule that describes the actions a player will take at each decision point
Block pricing
Marginal Revenue
Strategy
Bargaining Power of Suppliers
23. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Interdependence
Merger
Cheating
24. Revenue-Costs
Cournot equilibrium
Common knowledge
Contestable market
Profit
25. A situation in which neither firm has incentive to change its output given the other firm's output
Socially optimal price
Normal-form game
Monopoly (characteristics)
Cournot equilibrium
26. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Barrier to entry
Economies of scale
Tit-for-tat strategy
Differentiated oligopoly
27. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Non-rivalrous consumption
Conglomerate Merger
Examples of Monopolistic Competition
Simultaneous-move game
28. 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
Perfect Competitor Making a Profit
Import competition
Cournot equilibrium
Mutual Interdependence
29. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Non-price competition
Collusion
Payoff matrix
Credible threat
30. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Examples of Monopolistic Competition
Commodity bundling
Collusion
Dansby-Willig performance index
31. The price that is low enough to deter entry
Vertical Merger
Perfect Competition Short Run Supply
Indefinitely repeated game
Limit price
32. A simpler way to operationalize first-degree price discrimination
Two-part Tariff Method of Pricing
Mutual interdependence
Limit price
Dominant strategy equilibrium
33. Identical or substitutable
Fair return price
Lerner index
Minimum efficient scale (full capacity)
Undifferentiated
34. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Normal-form game
Brand Multiplication
Payoff matrix
Present Value (PV)
35. 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)
Barrier to entry
Trigger strategy
Tacit collusion
Mixed (randomized) strategy
36. The exclusive right to a product for a period of 20 years from the date the product is invented
Fair return price
Simultaneous decision games
Patent
Conglomerate Merger
37. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Minimum efficient scale (full capacity)
One-shot game
Empty threat
Limit pricing
38. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
What is game?
Kinked demand curve model
Prisoner's dilemma
Implicit Collusion
39. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Cournot oligopoly
High Price Elasticity
Perfect Competition (characteristics)
Reservation Price
40. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Monopoly (characteristics)
Open Collusion
Subgame perfect equilibrium
Bargaining Power of Suppliers
41. Both players have dominant strategies and play them
Tacit collusion
Dominant strategy equilibrium
Mutual Interdependence
Third-degree price discrimination
42. Long-run marginal cost curve above long-run average cost
Simultaneous-move game
Prisoner's dilemma
Mutual Interdependence
Perfect Competition Long Run Supply
43. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Simultaneous decision games
Perfect Competition Barriers to Entry
Equilibrium
Fair return price
44. A combination of two or more companies into one company
Market Structure
Contestable market
Nash equilibrium
Merger
45. The practice of bundling several different products together and selling them at a single "bundle" price
Price matching
Examples of Monopolistic Competition
Commodity bundling
Merger
46. 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
Cournot equilibrium
Cournot oligopoly
Non-rivalrous consumption
Examples of Oligopoly
47. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Price Leadership
Payoff matrix
Vertical Merger
Block pricing
48. 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
Dominant strategy
Fair return price
Contestable market
Tacit collusion
49. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Bargaining Power of Buyers
Rent-seeking behavior
Cooperative equilibrium
High Price Elasticity
50. A strategy that guarantees the highest payoff given the worst possible scenario
Secure strategy
Maximizing profit in Oligopoly games
First-mover advantage
Two-part pricing