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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. First firm to set its output (Stackelberg's model)
Leader
The Threat from Potential Entrants Firms
Common knowledge
Brand Multiplication
2. Using advertising and other means to try to increase a firm's sales
Lerner index
Barrier to entry
Non-price competition
Competitive market
3. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Extensive-form game
Tit-for-tat strategy
Perfect Competition Short Run Supply
Monopolistic Characteristics:
4. 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)
Network effects
Barrier to entry
The Threat from Potential Entrants Firms
Payoff matrix
5. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Open Collusion
Finding profit for oligopoly games
Unbalanced Oligopoly
Market
6. The practice of bundling several different products together and selling them at a single "bundle" price
Brand Multiplication
Commodity bundling
Examples of Monopolistic Competition
Dansby-Willig performance index
7. 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
Cheating
Rothschild index
Payoff table
Cooperation
8. Demand line is above ATC curve
Oligopoly
Network effects
Perfect Competitor Making a Profit
Non-cooperative equilibrium
9. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Two-part pricing
Commodity bundling
Payoff matrix
Perfect Competition Short Run Supply
10. All firms and individuals willing and able to buy or sell a particular product
Market
Cheating
Subgame perfect equilibrium
Secure strategy
11. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Second-Degree Price Discrimination
Perfect Competition Long Run Supply
Examples of Monopolistic Competition
Randomized pricing
12. Actions taken by a firm to achieve a goal - such as maximizing profits
Marginal Revenue
Mutual Interdependence
Cheating
Business strategy
13. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Rent-seeking behavior
Non-rivalrous consumption
Perfect Competition (characteristics)
Merger
14. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Peak-load pricing
Contestable market
Present Value (PV)
Payoff matrix
15. 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
Homogenous oligopoly
Merger
High Price Elasticity
16. A situation in which neither firm has incentive to change its output given the other firm's output
Kinked-demand curve
Payoff
Perfect Competition Barriers to Entry
Cournot equilibrium
17. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
Payoff
Nash equilibrium
Undifferentiated
18. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Product differentiation
Stackelberg oligopoly
Implicit Collusion
Limit pricing
19. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Cooperative equilibrium
Monopolistic Competition
Lerner index
Fair return price
20. 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
Vertical Merger
Cournot oligopoly
Tacit collusion
Lerner index
21. Maximize economic profit by producing the quantity at which MC=MR
Cross-subsidy pricing
Cournot equilibrium
Maximizing profit in Oligopoly games
Brand Multiplication
22. Game in which each player makes decisions without knowledge of the other player's decisions
Non-rivalrous consumption
Simultaneous-move game
Undifferentiated
Simultaneous decision games
23. 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
Mixed (randomized) strategy
Perfect Competition Short Run Supply
Subgame perfect equilibrium
Sweezy oligopoly
24. Actions taken by firms to plan for and react to competition from rival firms
Mutual Interdependence
Reservation Price
Ownership of a Key Input
Strategic behavior
25. The competition for sales between the products of one industry and the products of another industry
Market
Minimum efficient scale (full capacity)
Inter-industry competition
Mixed (randomized) strategy
26. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Kinked demand curve model
Perfect Competitor Making a Profit
First-Degree Price Discrimination (Perfect)
Collusion
27. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Tacit collusion
Implicit Collusion
Perfect Competitor Characteristics
Business strategy
28. An oligopoly in which the firms produce a standardized product
Homogenous oligopoly
Business strategy
Tit-for-tat strategy
Perfect Competitor Characteristics
29. A strategy or action that always provides the best outcome no matter what decisions rivals make
Dominant strategy
Secure strategy
Maximizing profit in Oligopoly games
Open Collusion
30. 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
Dominant strategy
Open Collusion
Trigger strategy
Inter-industry competition
31. In game theory - a game that is played again sometime after the previous game ends
Repeated game
Minimum efficient scale (full capacity)
Non-cooperative behavior
What is game?
32. A combination of two or more companies into one company
Non-rivalrous consumption
Dominant firm oligopoly
Price Leadership
Merger
33. 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
Rothschild index
Tacit collusion
Herfindahl-Hirschman index (HHI)
34. 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
Inefficiency
Competitive market
Market Structure
Price Leadership
35. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Limit pricing
Limit price
Examples of Oligopoly
Common knowledge
36. A product's ability to satisfy a large number of consumers at the same time
Perfect Competition (characteristics)
Simultaneous consumption
Product Differentiation
Leader
37. 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
Block pricing
Kinked demand curve model
Monopolistic Competition
Market
38. Nash equilibrium - the result when each player in a game chooses the action that maximizes his or her payoff given the actions of other players - ignoring the effects of his or her action on the payoffs received by those players (when you confess w
High Price Elasticity
Perfect Competition Barriers to Entry
Undifferentiated
Non-cooperative equilibrium
39. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
What is game?
No cooperative equilibrium
Stackelberg oligopoly
Homogenous oligopoly
40. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Competitive market
Duopoly
Non-price competition
Cutthroat Competition
41. 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
Stackelberg oligopoly
Tacit collusion
Mutual Interdependence
Block pricing
42. Identical or substitutable
Simultaneous consumption
Herfindahl-Hirschman index (HHI)
Undifferentiated
Perfect Competition Short Run Supply
43. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans
Dominant strategy
Secure strategy
Product Differentiation
Bertrand oligopoly
44. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Socially optimal price
Horizontal Merger/Integration
Non-cooperative behavior
45. A situation in which no one wants to change his or her behavior
Cournot equilibrium
Indefinitely repeated game
Equilibrium
Primary Sources of Monopolistic Power
46. A situation in which a change in price strategy by one firm affects sales and profits of another
Mutual interdependence
Perfect Competition Barriers to Entry
Limit pricing
Perfect Competitor Characteristics
47. A game that is played over and over again forever and in which players receive payoffs during each play of the game
First-Degree Price Discrimination (Perfect)
Indefinitely repeated game
Profit
Market
48. Revenue-Costs
Limit price
Cournot oligopoly
Examples of Monopolistic Competition
Profit
49. Variations on one good so that a firm can increase market sharea
Price matching
Cross-subsidy pricing
Two-part Tariff Method of Pricing
Brand Multiplication
50. When a manager makes a noncooperative decision
Third-degree price discrimination
One-shot game
Cheating
Horizontal Merger/Integration