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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 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
Two-part pricing
Subgame perfect equilibrium
Finding profit for oligopoly games
Mutual interdependence
2. The competition that domestic firms encounter from the products and services of foreign producers
Credible threat
Import competition
Dominant strategy equilibrium
Secure strategy
3. In game theory - a game that is played again sometime after the previous game ends
Marginal Revenue
Repeated game
Disappearing invisible hand
Rent-seeking behavior
4. A combination of two or more companies into one company
Cross-subsidy pricing
Dansby-Willig performance index
Price Leadership
Merger
5. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Second-Degree Price Discrimination
Inefficiency
Two-part pricing
Extensive-form game
6. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Cheating
Bargaining Power of Suppliers
Four-firm concentration ratio
7. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Non-rivalrous consumption
Price matching
Prisoners' dilemma
Tit-for-tat strategy
8. Game in which one player makes a move after observing the other player's move
Simultaneous decision games
Maximizing profit in Oligopoly games
Profit
Sequential-move game
9. All firms and individuals willing and able to buy or sell a particular product
Perfect Competitor Making a Profit
Rothschild index
Price war
Market
10. 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
Limit price
Rent-seeking behavior
Concentration Ratio
Extensive-form game
11. Rules - strategies - payoffs - outcomes
Strategic behavior
Payoff table
Cutthroat Competition
What is game?
12. Long-run marginal cost curve above long-run average cost
Open Collusion
Kinked-demand curve
Pure monopoly
Perfect Competition Long Run Supply
13. A situation in which neither firm has incentive to change its output given the other firm's output
Brand Multiplication
Market Structure
Cournot equilibrium
Vertical Merger
14. Price Sensitive
Herfindahl-Hirschman index (HHI)
Dansby-Willig performance index
Dominant firm oligopoly
High Price Elasticity
15. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase
Interdependence
Unbalanced Oligopoly
Block pricing
The Threat from Potential Entrants Firms
16. Toothpaste - shampoo - restaurants - banks
Contestable market
Dominant strategy equilibrium
Examples of Monopolistic Competition
Bertrand oligopoly
17. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Non-cooperative behavior
Perfect Competition Long Run Supply
Reservation Price
Four-firm concentration ratio
18. In game theory - benefit obtained by party that moves first in a sequential game
Reservation Price
Brand Multiplication
Oligopoly
First-mover advantage
19. 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
Finding profit for oligopoly games
Disappearing invisible hand
High Price Elasticity
Nonprime competition
20. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Trigger strategy
Oligopoly
Undifferentiated
21. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Imperfect competition
Cournot equilibrium
Finding profit for oligopoly games
Implicit Collusion
22. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Collusion
Commodity bundling
Indefinitely repeated game
Nonprime competition
23. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy
Nash equilibrium
Horizontal Merger/Integration
Equilibrium
The Threat from Potential Entrants Firms
24. Cooperation among firms that does not involve an explicit agreement
Follower
Tacit collusion
Open Collusion
Homogenous oligopoly
25. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Bargaining Power of Buyers
Common knowledge
Perfect Competition Short Run Supply
Kinked demand curve model
26. Involves price-fixing
Tacit collusion
Covert Collusion
Inefficiency
Business strategy
27. Increases in the value of a product to each user - including existing users - as the total number of users rises
Payoff matrix
Disappearing invisible hand
Conglomerate Merger
Network effects
28. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Product Differentiation
Simultaneous-move game
Double marginalization
29. A firm whose price decisions are tacitly accepted and followed by others in the industry
Inefficiency
Concentration Ratio
Price Leadership
Inter-industry competition
30. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Bertrand oligopoly
One-shot game
Common knowledge
Inefficiency
31. 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
Limit pricing
Differentiated oligopoly
Common knowledge
32. The competition for sales between the products of one industry and the products of another industry
Inter-industry competition
Import competition
Profit
Monopolistic Competition
33. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Tit-for-tat strategy
Peak-load pricing
Limit price
Monopolistic Characteristics:
34. 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
Collusion
Product differentiation
Oligopoly
Nonprime competition
35. 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.)
Double marginalization
Subgame perfect equilibrium
Cooperation
Monopolistic Characteristics:
36. Simultaneous move game that is not repeated
One-shot game
Patent
Market Structure
Common knowledge
37. The derivative of total revenue
Collusion
Product Differentiation
Dansby-Willig performance index
Marginal Revenue
38. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Rothschild index
Stackelberg oligopoly
Inefficiency
Collusion
39. Produce identical products
Trigger strategy
Barrier to entry
Perfect Competitor Characteristics
One-shot game
40. Steel - autos - colas - airlines
Examples of Oligopoly
First-mover advantage
Kinked demand curve model
Secure strategy
41. When a manager makes a noncooperative decision
Cheating
Unbalanced Oligopoly
Two-part pricing
Examples of Oligopoly
42. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Rothschild index
Repeated game
Dansby-Willig performance index
No cooperative equilibrium
43. 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
Undifferentiated
Import competition
Cournot oligopoly
Competitive market
44. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Simultaneous consumption
Implicit Collusion
Perfect Competitor Characteristics
Payoff matrix
45. Specific assets - Economies of scale - Excess capacity - Reputation effects
Tacit collusion
Leader
Perfect Competition Barriers to Entry
Maximizing profit in Oligopoly games
46. Identical or substitutable
Normal-form game
Vertical Merger
Sweezy oligopoly
Undifferentiated
47. Keeps the price just where it is to maximize profit
Cutthroat Competition
Network effects
Nonprime competition
Conglomerate Merger
48. 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
Joint Venture
Ownership of a Key Input
Nonprime competition
Monopolistic Competition
49. The exclusive right to a product for a period of 20 years from the date the product is invented
Open Collusion
Peak-load pricing
Limit pricing
Patent
50. 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
Price discrimination
Examples of Oligopoly
Sequential-move game