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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. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Payoff matrix
Common knowledge
Homogenous oligopoly
Repeated game
2. Maximize economic profit by producing the quantity at which MC=MR
Import competition
Maximizing profit in Oligopoly games
One-shot game
Limit pricing
3. Face competition from companies that currently are not in the market but might enter
Limit price
Vertical Merger
Product Differentiation
The Threat from Potential Entrants Firms
4. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Limit pricing
Mutual Interdependence
Cross-subsidy pricing
Competitive market
5. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Normal-form game
Brand Multiplication
Conglomerate Merger
Trigger strategy
6. In game theory - a decision rule that describes the actions a player will take at each decision point
Trigger strategy
Strategy
Cournot oligopoly
Non-price competition
7. A situation in which no one wants to change his or her behavior
Commodity bundling
Equilibrium
Tacit collusion
No cooperative equilibrium
8. 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
Equilibrium
Tit-for-tat strategy
Joint Venture
Vertical Merger
9. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Present Value (PV)
Primary Sources of Monopolistic Power
Mutual interdependence
Dansby-Willig performance index
10. 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
Homogenous oligopoly
Payoff matrix
Cournot oligopoly
Cournot equilibrium
11. Marginal cost curve above average variable cost - P* = SRMC
Equilibrium
Rothschild index
Perfect Competition Short Run Supply
Differentiated oligopoly
12. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Prisoners' dilemma
Perfect Competition Long Run Supply
Horizontal Merger/Integration
Duopoly
13. All firms and individuals willing and able to buy or sell a particular product
Market
Bertrand oligopoly
Cheating
Payoff
14. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Third-degree price discrimination
Limit pricing
Bargaining Power of Buyers
Concentration Ratio
15. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)
Double marginalization
Bargaining Power of Suppliers
Four-firm concentration ratio
Collusion
16. Long-run marginal cost curve above long-run average cost
Sequential game
Two-part pricing
Network effects
Perfect Competition Long Run Supply
17. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Product Differentiation
Two-part Tariff Method of Pricing
Covert Collusion
Perfect Competition (characteristics)
18. 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
Interdependence
Cheating
Third-Degree Price Discrimination
Finding profit for oligopoly games
19. An equilibrium in a game in which players cooperate to increase their mutual payoff
Cooperative equilibrium
Monopolistic Characteristics:
Mutual Interdependence
Network effects
20. Revenue-Costs
Profit
Natural Monopoly (local phone or electric company)
Non-cooperative equilibrium
Sweezy oligopoly
21. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Non-price competition
Cheating
Product differentiation
Competitive market
22. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Undifferentiated
Pure monopoly
Unbalanced Oligopoly
Covert Collusion
23. Both players have dominant strategies and play them
Examples of Oligopoly
Mutual Interdependence
Dominant strategy equilibrium
Commodity bundling
24. In game theory - benefit obtained by party that moves first in a sequential game
Four-firm concentration ratio
Nonprime competition
First-mover advantage
Mutual interdependence
25. Actions taken by a firm to achieve a goal - such as maximizing profits
Leader
Undifferentiated
Business strategy
Perfect Competitor Making a Profit
26. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Tacit collusion
Economies of scale
Empty threat
Disappearing invisible hand
27. The price of a product that results in the most efficient allocation of an economy's resources and that is equal to the marginal cost of the product
Socially optimal price
Kinked-demand curve
Strategic behavior
Undifferentiated
28. Increases in the value of a product to each user - including existing users - as the total number of users rises
Patent
Network effects
Implicit Collusion
Finding profit for oligopoly games
29. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Simultaneous decision games
Rothschild index
Trigger strategy
Cutthroat Competition
30. The derivative of total revenue
Conglomerate Merger
Monopolistic Characteristics:
Non-rivalrous consumption
Marginal Revenue
31. A strategy that guarantees the highest payoff given the worst possible scenario
Perfect Competitor Characteristics
Secure strategy
Inefficiency
Extensive-form game
32. Involves price-fixing
Present Value (PV)
Extensive-form game
Payoff
Covert Collusion
33. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Mutual interdependence
Maximizing profit in Oligopoly games
Cutthroat Competition
Tit-for-tat strategy
34. 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
Payoff
Cross-subsidy pricing
Extensive-form game
Implicit Collusion
35. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Disappearing invisible hand
Merger
Sequential game
Undifferentiated
36. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Mixed (randomized) strategy
Price discrimination
Secure strategy
Reservation Price
37. Simultaneous move game that is not repeated
Cooperation
Sweezy oligopoly
One-shot game
Repeated game
38. First firm to set its output (Stackelberg's model)
Leader
Perfect Competitor Characteristics
Cutthroat Competition
Herfindahl-Hirschman index (HHI)
39. 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
Rent-seeking behavior
Repeated game
Sequential game
40. In game theory - a game that is played again sometime after the previous game ends
Transfer pricing
Price discrimination
Finding profit for oligopoly games
Repeated game
41. Steel - autos - colas - airlines
Equilibrium
Examples of Oligopoly
One-shot game
Perfect Competitor Making a Profit
42. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Limit pricing
Follower
Open Collusion
Dansby-Willig performance index
43. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Mixed (randomized) strategy
Payoff table
High Price Elasticity
Payoff matrix
44. Keeps the price just where it is to maximize profit
Cutthroat Competition
Open Collusion
Perfect Competition (characteristics)
Third-Degree Price Discrimination
45. 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
Cooperation
Duopoly
Two-part pricing
Ownership of a Key Input
46. 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.)
Covert Collusion
Inefficiency
Monopolistic Characteristics:
First-mover advantage
47. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Monopolistic Competition
Nash equilibrium
Second-Degree Price Discrimination
Herfindahl-Hirschman index (HHI)
48. The situation when a firm's long-run average costs fall as it increases output
Two-part pricing
Bargaining Power of Buyers
Normal-form game
Economies of scale
49. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Examples of Monopolistic Competition
Simultaneous decision games
Perfect Competition (characteristics)
No cooperative equilibrium
50. A situation in which a change in price strategy by one firm affects sales and profits of another
Mutual interdependence
Bargaining Power of Suppliers
Inefficiency
Pure monopoly