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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 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
Simultaneous decision games
Unbalanced Oligopoly
Reservation Price
Mutual Interdependence
2. Toothpaste - shampoo - restaurants - banks
Examples of Monopolistic Competition
The Threat from Potential Entrants Firms
Rent-seeking behavior
Price Leadership
3. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Product Differentiation
Normal-form game
Simultaneous consumption
Third-degree price discrimination
4. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Price war
Monopoly (characteristics)
Concentration Ratio
Third-Degree Price Discrimination
5. Identical or substitutable
Follower
Trigger strategy
Cross-subsidy pricing
Undifferentiated
6. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Collusion
Prisoner's dilemma
Normal-form game
Block pricing
7. Rules - strategies - payoffs - outcomes
Limit price
Monopolistic Competition
What is game?
Simultaneous consumption
8. Increases in the value of a product to each user - including existing users - as the total number of users rises
Perfect Competition Barriers to Entry
Network effects
Payoff table
Block pricing
9. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Strategic behavior
Limit pricing
Differentiated oligopoly
Two-part Tariff Method of Pricing
10. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Nonprime competition
Present Value (PV)
Mixed (randomized) strategy
Tacit collusion
11. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Perfect Competitor Characteristics
Dominant strategy equilibrium
Prisoner's dilemma
12. 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
Product Differentiation
Rothschild index
Rent-seeking behavior
Price Leadership
13. Marginal cost curve above average variable cost - P* = SRMC
Perfect Competition Short Run Supply
Differentiated oligopoly
Fair return price
Lerner index
14. 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
Marginal Revenue
Examples of Monopolistic Competition
Perfect Competitor Characteristics
15. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Payoff matrix
Cournot equilibrium
Cooperation
Mutual interdependence
16. 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
Price Leadership
Vertical Merger
Double marginalization
Perfect Competition (characteristics)
17. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Conglomerate Merger
Cournot oligopoly
Two-part Tariff Method of Pricing
Simultaneous decision games
18. An oligopoly in which the firms produce a differentiated product
Limit pricing
Differentiated oligopoly
Price matching
Limit price
19. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Third-degree price discrimination
Rent-seeking behavior
Bargaining Power of Suppliers
Herfindahl-Hirschman index (HHI)
20. Variations on one good so that a firm can increase market sharea
Cooperation
Dominant strategy equilibrium
Second-Degree Price Discrimination
Brand Multiplication
21. 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
Non-cooperative equilibrium
Commodity bundling
Nash equilibrium
22. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Transfer pricing
Present Value (PV)
Fair return price
Lerner index
23. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Payoff matrix
One-shot game
Price Leadership
Product differentiation
24. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Subgame perfect equilibrium
Reservation Price
Nash equilibrium
Payoff matrix
25. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Basis for Product Differentiation
Secure strategy
Unbalanced Oligopoly
Price matching
26. Takes Place inside the Mind of the consumer
Product Differentiation
Limit price
Limit pricing
Network effects
27. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Price war
Joint Venture
Brand Multiplication
Indefinitely repeated game
28. Rival who sets its output after the leader (Stackelberg's model)
Two-part pricing
Follower
Disappearing invisible hand
Covert Collusion
29. 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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30. A situation in which a change in price strategy by one firm affects sales and profits of another
Secure strategy
Limit price
Dominant firm oligopoly
Mutual interdependence
31. 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)
First-mover advantage
Price Leadership
Homogenous oligopoly
Stackelberg oligopoly
32. 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
Maximizing profit in Oligopoly games
Limit pricing
Homogenous oligopoly
33. The situation when a firm's long-run average costs fall as it increases output
Cutthroat Competition
Non-cooperative behavior
Equilibrium
Economies of scale
34. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Non-rivalrous consumption
Implicit Collusion
Randomized pricing
Maximizing profit in Oligopoly games
35. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Repeated game
Leader
Peak-load pricing
Kinked-demand curve
36. 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
Vertical Merger
Normal-form game
Examples of Oligopoly
Sweezy oligopoly
37. The practice of charging different prices to consumers for the same good or service
Price discrimination
Non-rivalrous consumption
Peak-load pricing
Two-part pricing
38. 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
Limit pricing
Third-degree price discrimination
Competitive market
Prisoner's dilemma
39. Simultaneous move game that is not repeated
One-shot game
Simultaneous consumption
Socially optimal price
Four-firm concentration ratio
40. Multiple firms produce similar products - Firms face downward sloping demand curves - Profit maximization occurs where MC=MR - With free entry and exit - firms compete away economic profits
Lerner index
Monopolistic Competition
Herfindahl-Hirschman index (HHI)
Barrier to entry
41. 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
Contestable market
What is game?
Basis for Product Differentiation
Business strategy
42. The derivative of total revenue
Oligopoly
Price matching
Empty threat
Marginal Revenue
43. A combination of two or more companies into one company
Sweezy oligopoly
Commodity bundling
Merger
Block pricing
44. The physical characteristics of the market within which firms interact
Prisoners' dilemma
Perfect Competition Short Run Supply
Market Structure
Payoff
45. Actions taken by firms to plan for and react to competition from rival firms
Simultaneous-move game
Transfer pricing
Payoff
Strategic behavior
46. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Bargaining Power of Buyers
Marginal Revenue
Brand Multiplication
Profit
47. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Payoff matrix
Merger
Price discrimination
Common knowledge
48. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Secure strategy
Normal-form game
Basis for Product Differentiation
Rothschild index
49. A strategy that guarantees the highest payoff given the worst possible scenario
Price discrimination
Inter-industry competition
Duopoly
Secure strategy
50. Price Sensitive
Perfect Competition Barriers to Entry
Sequential-move game
Randomized pricing
High Price Elasticity