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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. All firms and individuals willing and able to buy or sell a particular product
Profit
Market
Third-degree price discrimination
Two-part pricing
2. In game theory - a decision rule that describes the actions a player will take at each decision point
Third-degree price discrimination
What is game?
Strategy
Payoff
3. Identical or substitutable
Joint Venture
Non-cooperative behavior
Competitive market
Undifferentiated
4. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Cross-subsidy pricing
Nash equilibrium
Rothschild index
Credible threat
5. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Concentration Ratio
Vertical Merger
Minimum efficient scale (full capacity)
Tacit collusion
6. Increases in the value of a product to each user - including existing users - as the total number of users rises
Monopolistic Characteristics:
Monopoly (characteristics)
Network effects
Nonprime competition
7. 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
Payoff matrix
Implicit Collusion
Bargaining Power of Suppliers
Second-Degree Price Discrimination
8. Toothpaste - shampoo - restaurants - banks
Open Collusion
Examples of Monopolistic Competition
Extensive-form game
Monopolistic Characteristics:
9. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)
Indefinitely repeated game
Monopolistic Characteristics:
Ownership of a Key Input
Patent
10. 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
Perfect Competition (characteristics)
Kinked-demand curve
Interdependence
Third-degree price discrimination
11. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Examples of Oligopoly
Payoff matrix
Dansby-Willig performance index
Prisoner's dilemma
12. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Implicit Collusion
Inefficiency
Cooperation
Rothschild index
13. 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
Simultaneous-move game
Tacit collusion
Finding profit for oligopoly games
Marginal Revenue
14. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Repeated game
Common knowledge
Pure monopoly
15. 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
Finding profit for oligopoly games
Common knowledge
Cournot oligopoly
Examples of Monopolistic Competition
16. 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
Ownership of a Key Input
Mutual Interdependence
Non-cooperative equilibrium
Duopoly
17. Game in which one player makes a move after observing the other player's move
Sequential-move game
High Price Elasticity
Equilibrium
Tit-for-tat strategy
18. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Common knowledge
Present Value (PV)
Normal-form game
Socially optimal price
19. Using advertising and other means to try to increase a firm's sales
Common knowledge
Non-price competition
Minimum efficient scale (full capacity)
Price matching
20. An oligopoly in which the firms produce a differentiated product
Lerner index
Differentiated oligopoly
Non-cooperative behavior
Prisoners' dilemma
21. The reward received by a player in a game - such as the profit earned by an oligopolist
Repeated game
Mutual Interdependence
Cooperation
Payoff
22. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
The Threat from Potential Entrants Firms
Monopoly (characteristics)
Cheating
Inefficiency
23. The competition for sales between the products of one industry and the products of another industry
What is game?
Inter-industry competition
Kinked demand curve model
Perfect Competition Barriers to Entry
24. 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 firm oligopoly
Covert Collusion
Unbalanced Oligopoly
Bargaining Power of Suppliers
25. If production of a good requires a particular input - then control of that input can be a barrier to entry
Conglomerate Merger
Ownership of a Key Input
Extensive-form game
Implicit Collusion
26. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Second-Degree Price Discrimination
Follower
Dansby-Willig performance index
Payoff matrix
27. 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
Barrier to entry
Non-cooperative equilibrium
Two-part pricing
28. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Present Value (PV)
Price matching
Kinked-demand curve
Simultaneous consumption
29. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Normal-form game
Four-firm concentration ratio
Randomized pricing
Unbalanced Oligopoly
30. The situation when a firm's long-run average costs fall as it increases output
Horizontal Merger/Integration
Marginal Revenue
Monopolistic Competition
Economies of scale
31. In game theory - a statement of harmful intent by one party that the other party views as believable-- "if you do this - we will do that"
Kinked demand curve model
Rent-seeking behavior
Dominant strategy
Credible threat
32. A combination of two or more companies into one company
Non-price competition
Credible threat
Merger
Fair return price
33. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Minimum efficient scale (full capacity)
Tit-for-tat strategy
Vertical Merger
Rothschild index
34. A firm whose price decisions are tacitly accepted and followed by others in the industry
Price war
Price Leadership
Simultaneous-move game
Nonprime competition
35. A situation in which neither firm has incentive to change its output given the other firm's output
Non-price competition
Strategic behavior
The Threat from Potential Entrants Firms
Cournot equilibrium
36. 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
Horizontal Merger/Integration
Economies of scale
Open Collusion
37. 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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38. In game theory - benefit obtained by party that moves first in a sequential game
Payoff
Perfect Competitor Characteristics
Transfer pricing
First-mover advantage
39. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Joint Venture
Primary Sources of Monopolistic Power
No cooperative equilibrium
Imperfect competition
40. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Horizontal Merger/Integration
Simultaneous decision games
Vertical Merger
Price discrimination
41. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
First-Degree Price Discrimination (Perfect)
Payoff table
Competitive market
Sequential game
42. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Price war
Minimum efficient scale (full capacity)
Tacit collusion
Covert Collusion
43. 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
Repeated game
Nonprime competition
Trigger strategy
Secure strategy
44. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Price matching
Perfect Competition (characteristics)
Credible threat
Simultaneous decision games
45. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Rent-seeking behavior
Business strategy
Market Structure
Ownership of a Key Input
46. Demand line is above ATC curve
Trigger strategy
Perfect Competitor Making a Profit
Contestable market
Sequential-move game
47. The exclusive right to a product for a period of 20 years from the date the product is invented
Payoff matrix
Common knowledge
Patent
High Price Elasticity
48. Game in which each player makes decisions without knowledge of the other player's decisions
Implicit Collusion
Simultaneous-move game
Simultaneous consumption
Business strategy
49. The practice of charging different prices to consumers for the same good or service
Sequential game
Implicit Collusion
Price discrimination
Price war
50. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Undifferentiated
Price Leadership
No cooperative equilibrium
Payoff