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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. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Third-Degree Price Discrimination
Socially optimal price
Non-price competition
Inefficiency
2. Keeps the price just where it is to maximize profit
Cutthroat Competition
Covert Collusion
The Threat from Potential Entrants Firms
Sequential-move game
3. 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
Business strategy
Kinked-demand curve
Bargaining Power of Suppliers
Open Collusion
4. Cooperation among firms that does not involve an explicit agreement
Sequential game
Pure monopoly
Product differentiation
Tacit collusion
5. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Dominant strategy equilibrium
Implicit Collusion
Perfect Competitor Characteristics
Empty threat
6. 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.)
Mixed (randomized) strategy
Monopolistic Characteristics:
Conglomerate Merger
Secure strategy
7. 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)
Brand Multiplication
Cooperative equilibrium
Oligopoly
Four-firm concentration ratio
8. Actions taken by a firm to achieve a goal - such as maximizing profits
Rent-seeking behavior
Peak-load pricing
Open Collusion
Business strategy
9. All firms and individuals willing and able to buy or sell a particular product
Market
Contestable market
Equilibrium
Mutual Interdependence
10. Toothpaste - shampoo - restaurants - banks
Natural Monopoly (local phone or electric company)
Product Differentiation
First-mover advantage
Examples of Monopolistic Competition
11. Face competition from companies that currently are not in the market but might enter
Cross-subsidy pricing
The Threat from Potential Entrants Firms
Credible threat
Conglomerate Merger
12. The physical characteristics of the market within which firms interact
Cutthroat Competition
Homogenous oligopoly
Market Structure
Randomized pricing
13. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Implicit Collusion
Kinked-demand curve
Concentration Ratio
Rent-seeking behavior
14. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Simultaneous decision games
Nash equilibrium
Unbalanced Oligopoly
Monopolistic Characteristics:
15. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Fair return price
Secure strategy
Credible threat
Third-Degree Price Discrimination
16. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Sequential game
No cooperative equilibrium
Tacit collusion
17. 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
Payoff matrix
Extensive-form game
Cross-subsidy pricing
Sweezy oligopoly
18. If production of a good requires a particular input - then control of that input can be a barrier to entry
Cooperative equilibrium
Limit price
Ownership of a Key Input
Brand Multiplication
19. When the decisions of two or more firms significantly affect each others' profits
Merger
Bargaining Power of Suppliers
Fair return price
Interdependence
20. 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
Perfect Competition Short Run Supply
Tacit collusion
Prisoners' dilemma
Subgame perfect equilibrium
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)
Primary Sources of Monopolistic Power
Barrier to entry
Perfect Competition Short Run Supply
Patent
22. Maximize economic profit by producing the quantity at which MC=MR
Maximizing profit in Oligopoly games
Brand Multiplication
Product Differentiation
Non-price competition
23. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Reservation Price
Pure monopoly
Cross-subsidy pricing
Concentration Ratio
24. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Concentration Ratio
Non-rivalrous consumption
Perfect Competition Short Run Supply
Ownership of a Key Input
25. 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
Disappearing invisible hand
Profit
Common knowledge
Product differentiation
26. 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
Limit price
Contestable market
Non-cooperative equilibrium
Cooperative equilibrium
27. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Tit-for-tat strategy
Simultaneous-move game
One-shot game
Second-Degree Price Discrimination
28. 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 oligopoly
Extensive-form game
Payoff
Open Collusion
29. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Equilibrium
Maximizing profit in Oligopoly games
No cooperative equilibrium
Ownership of a Key Input
30. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Payoff table
Tacit collusion
Horizontal Merger/Integration
Business strategy
31. The price that is low enough to deter entry
What is game?
Limit price
Marginal Revenue
Unbalanced Oligopoly
32. A simpler way to operationalize first-degree price discrimination
Common knowledge
Disappearing invisible hand
Mutual interdependence
Two-part Tariff Method of Pricing
33. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Perfect Competition Short Run Supply
Bertrand oligopoly
Price matching
Vertical Merger
34. A product's ability to satisfy a large number of consumers at the same time
Lerner index
Simultaneous consumption
Marginal Revenue
Dominant strategy
35. 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
Fair return price
Block pricing
Disappearing invisible hand
Trigger strategy
36. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Bertrand oligopoly
Two-part Tariff Method of Pricing
Normal-form game
Stackelberg oligopoly
37. A situation in which no one wants to change his or her behavior
Socially optimal price
Follower
Maximizing profit in Oligopoly games
Equilibrium
38. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so
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39. 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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40. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Concentration Ratio
Two-part Tariff Method of Pricing
Sequential game
Perfect Competitor Making a Profit
41. Game in which one player makes a move after observing the other player's move
Sequential-move game
High Price Elasticity
Bargaining Power of Buyers
Examples of Oligopoly
42. 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"
Credible threat
Covert Collusion
Dominant firm oligopoly
Import competition
43. The reward received by a player in a game - such as the profit earned by an oligopolist
Trigger strategy
Contestable market
Payoff
Indefinitely repeated game
44. Marginal cost curve above average variable cost - P* = SRMC
Non-cooperative equilibrium
Limit pricing
Subgame perfect equilibrium
Perfect Competition Short Run Supply
45. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Bargaining Power of Suppliers
Profit
Covert Collusion
Simultaneous decision games
46. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Fair return price
Bargaining Power of Suppliers
Rent-seeking behavior
Commodity bundling
47. In game theory - a game that is played again sometime after the previous game ends
Repeated game
Profit
Dominant strategy equilibrium
Extensive-form game
48. The smallest quantity at which the average cost curve reaches its minimum
Non-cooperative equilibrium
No cooperative equilibrium
Common knowledge
Minimum efficient scale (full capacity)
49. 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
Transfer pricing
Leader
Joint Venture
Rothschild index
50. Revenue-Costs
Maximizing profit in Oligopoly games
Undifferentiated
Covert Collusion
Profit