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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
Mutual interdependence
Transfer pricing
Subgame perfect equilibrium
Non-rivalrous consumption
2. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
First-mover advantage
Randomized pricing
Marginal Revenue
Limit price
3. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor
Lerner index
Disappearing invisible hand
Empty threat
Pure monopoly
4. Steel - autos - colas - airlines
Examples of Oligopoly
Transfer pricing
Strategic behavior
Cournot equilibrium
5. Long-run marginal cost curve above long-run average cost
Perfect Competition Long Run Supply
Horizontal Merger/Integration
Four-firm concentration ratio
Price war
6. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Perfect Competitor Making a Profit
Primary Sources of Monopolistic Power
Empty threat
Strategy
7. Toothpaste - shampoo - restaurants - banks
Examples of Monopolistic Competition
Open Collusion
Limit price
Leader
8. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
One-shot game
Imperfect competition
Present Value (PV)
Extensive-form game
9. Using advertising and other means to try to increase a firm's sales
Non-price competition
Ownership of a Key Input
Concentration Ratio
Market Structure
10. A situation in which no one wants to change his or her behavior
Price Leadership
Rent-seeking behavior
Inter-industry competition
Equilibrium
11. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Concentration Ratio
Reservation Price
Nonprime competition
Import competition
12. Game in which one player makes a move after observing the other player's move
Prisoner's dilemma
High Price Elasticity
No cooperative equilibrium
Sequential-move game
13. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Four-firm concentration ratio
Implicit Collusion
Sequential-move game
Simultaneous decision games
14. Involves price-fixing
Third-degree price discrimination
Cross-subsidy pricing
Covert Collusion
Natural Monopoly (local phone or electric company)
15. 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
Disappearing invisible hand
Nash equilibrium
Open Collusion
16. The practice of bundling several different products together and selling them at a single "bundle" price
Horizontal Merger/Integration
Commodity bundling
Barrier to entry
Cournot equilibrium
17. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Nash equilibrium
Bargaining Power of Buyers
Contestable market
Differentiated oligopoly
18. 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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19. 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
Cheating
Tit-for-tat strategy
Second-Degree Price Discrimination
20. 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)
Inefficiency
Leader
Stackelberg oligopoly
First-mover advantage
21. Single firm is sole producer of a product for which there are no close substitutes
Rothschild index
Pure monopoly
Limit price
Patent
22. The reward received by a player in a game - such as the profit earned by an oligopolist
First-Degree Price Discrimination (Perfect)
Inefficiency
Trigger strategy
Payoff
23. 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"
Perfect Competition Barriers to Entry
Nonprime competition
Credible threat
Homogenous oligopoly
24. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Primary Sources of Monopolistic Power
Price war
Tit-for-tat strategy
Nonprime competition
25. The derivative of total revenue
Marginal Revenue
Dominant strategy equilibrium
Repeated game
Indefinitely repeated game
26. A simpler way to operationalize first-degree price discrimination
Two-part Tariff Method of Pricing
Cross-subsidy pricing
Undifferentiated
Nonprime competition
27. Marginal cost curve above average variable cost - P* = SRMC
Randomized pricing
Sequential-move game
The Threat from Potential Entrants Firms
Perfect Competition Short Run Supply
28. In game theory - a game that is played again sometime after the previous game ends
Stackelberg oligopoly
Dominant strategy
Repeated game
Oligopoly
29. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Joint Venture
Sequential game
Perfect Competitor Characteristics
30. All firms and individuals willing and able to buy or sell a particular product
Market
Perfect Competitor Making a Profit
Block pricing
Monopoly (characteristics)
31. Revenue-Costs
Strategic behavior
Conglomerate Merger
Trigger strategy
Profit
32. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Third-Degree Price Discrimination
The Threat from Potential Entrants Firms
Examples of Monopolistic Competition
Commodity bundling
33. Maximize economic profit by producing the quantity at which MC=MR
Maximizing profit in Oligopoly games
Peak-load pricing
Horizontal Merger/Integration
Non-price competition
34. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Price matching
Prisoner's dilemma
Sequential game
No cooperative equilibrium
35. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Peak-load pricing
Duopoly
Credible threat
Perfect Competition Short Run Supply
36. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Nash equilibrium
Inefficiency
No cooperative equilibrium
Limit pricing
37. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Leader
Common knowledge
Prisoners' dilemma
Socially optimal price
38. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Double marginalization
Perfect Competitor Making a Profit
Natural Monopoly (local phone or electric company)
Prisoners' dilemma
39. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Inter-industry competition
Vertical Merger
No cooperative equilibrium
Open Collusion
40. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Mutual Interdependence
Tacit collusion
Minimum efficient scale (full capacity)
Unbalanced Oligopoly
41. 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
Inter-industry competition
Tacit collusion
Examples of Monopolistic Competition
Trigger strategy
42. Specific assets - Economies of scale - Excess capacity - Reputation effects
Non-price competition
Perfect Competition Barriers to Entry
Strategy
Brand Multiplication
43. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
No cooperative equilibrium
Barrier to entry
Dansby-Willig performance index
Rothschild index
44. 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
Imperfect competition
Subgame perfect equilibrium
Mixed (randomized) strategy
Monopolistic Competition
45. 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
Mutual Interdependence
Equilibrium
Business strategy
Indefinitely repeated game
46. Actions taken by firms to plan for and react to competition from rival firms
Nash equilibrium
Strategic behavior
Mutual Interdependence
Natural Monopoly (local phone or electric company)
47. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Perfect Competition Barriers to Entry
Finding profit for oligopoly games
Two-part pricing
48. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Collusion
Limit price
Merger
Covert Collusion
49. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Two-part pricing
Inter-industry competition
Perfect Competition Short Run Supply
Second-Degree Price Discrimination
50. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Marginal Revenue
Inefficiency
Open Collusion
Monopolistic Competition