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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. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Horizontal Merger/Integration
Implicit Collusion
Dansby-Willig performance index
Limit pricing
2. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Common knowledge
Covert Collusion
Primary Sources of Monopolistic Power
Basis for Product Differentiation
3. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Payoff matrix
First-Degree Price Discrimination (Perfect)
Block pricing
Transfer pricing
4. The competition for sales between the products of one industry and the products of another industry
Sweezy oligopoly
Conglomerate Merger
Inter-industry competition
Contestable market
5. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Monopoly (characteristics)
Payoff
Import competition
Cross-subsidy pricing
6. 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
Cutthroat Competition
Cournot oligopoly
Simultaneous-move game
Monopolistic Competition
7. 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
Mutual Interdependence
Vertical Merger
Perfect Competition Long Run Supply
8. An oligopoly in which the firms produce a standardized product
Rothschild index
Homogenous oligopoly
Cooperative equilibrium
Four-firm concentration ratio
9. The exclusive right to a product for a period of 20 years from the date the product is invented
Vertical Merger
Monopoly (characteristics)
Patent
Bertrand oligopoly
10. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Randomized pricing
Tit-for-tat strategy
Vertical Merger
Bargaining Power of Buyers
11. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike
Kinked demand curve model
Herfindahl-Hirschman index (HHI)
Joint Venture
Trigger strategy
12. Actions taken by firms to plan for and react to competition from rival firms
The Threat from Potential Entrants Firms
Patent
Limit pricing
Strategic behavior
13. 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
Stackelberg oligopoly
Disappearing invisible hand
Bertrand oligopoly
Primary Sources of Monopolistic Power
14. A firm whose price decisions are tacitly accepted and followed by others in the industry
Present Value (PV)
Horizontal Merger/Integration
Price Leadership
Double marginalization
15. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Tit-for-tat strategy
Vertical Merger
Transfer pricing
Lerner index
16. 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"
Double marginalization
Cutthroat Competition
Examples of Monopolistic Competition
Credible threat
17. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Trigger strategy
Rent-seeking behavior
Tit-for-tat strategy
Normal-form game
18. Variations on one good so that a firm can increase market sharea
Double marginalization
Brand Multiplication
Payoff
First-Degree Price Discrimination (Perfect)
19. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Conglomerate Merger
Horizontal Merger/Integration
Sequential game
Perfect Competition Long Run Supply
20. Cooperation among firms that does not involve an explicit agreement
Tacit collusion
Rothschild index
Monopolistic Characteristics:
Price war
21. Ignoring the effects of their actions on each others' profits
Non-cooperative behavior
Tacit collusion
Tacit collusion
Credible threat
22. The practice of bundling several different products together and selling them at a single "bundle" price
Undifferentiated
Perfect Competition Barriers to Entry
Commodity bundling
Price discrimination
23. 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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24. 1/(1+i)n
Present Value (PV)
Non-price competition
Economies of scale
Perfect Competitor Characteristics
25. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Tit-for-tat strategy
Tacit collusion
Sequential-move game
Disappearing invisible hand
26. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Equilibrium
Leader
Tacit collusion
Perfect Competition (characteristics)
27. Actions taken by a firm to achieve a goal - such as maximizing profits
Price matching
Four-firm concentration ratio
Business strategy
Indefinitely repeated game
28. 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
Monopolistic Characteristics:
Joint Venture
Profit
Imperfect competition
29. 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
Implicit Collusion
Block pricing
Two-part Tariff Method of Pricing
Extensive-form game
30. 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
Simultaneous decision games
Payoff matrix
Lerner index
Unbalanced Oligopoly
31. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination
Mixed (randomized) strategy
Payoff table
Credible threat
Mutual Interdependence
32. A simpler way to operationalize first-degree price discrimination
Two-part Tariff Method of Pricing
Empty threat
Competitive market
Simultaneous-move game
33. The physical characteristics of the market within which firms interact
Simultaneous decision games
Third-Degree Price Discrimination
Two-part Tariff Method of Pricing
Market Structure
34. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Tacit collusion
Dominant strategy equilibrium
Nonprime competition
Kinked-demand curve
35. Rules - strategies - payoffs - outcomes
Oligopoly
Minimum efficient scale (full capacity)
What is game?
Transfer pricing
36. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Cutthroat Competition
Payoff table
Cross-subsidy 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
Mutual interdependence
Common knowledge
Prisoner's dilemma
Implicit Collusion
38. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Double marginalization
Competitive market
Fair return price
Socially optimal price
39. Takes Place inside the Mind of the consumer
Import competition
Product Differentiation
Bertrand oligopoly
Marginal Revenue
40. Toothpaste - shampoo - restaurants - banks
Non-rivalrous consumption
Mixed (randomized) strategy
Examples of Monopolistic Competition
Conglomerate Merger
41. If production of a good requires a particular input - then control of that input can be a barrier to entry
Ownership of a Key Input
Barrier to entry
Inefficiency
Imperfect competition
42. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Business strategy
Natural Monopoly (local phone or electric company)
Market Structure
Homogenous oligopoly
43. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Unbalanced Oligopoly
No cooperative equilibrium
Network effects
Third-degree price discrimination
44. Using advertising and other means to try to increase a firm's sales
Credible threat
High Price Elasticity
Profit
Non-price competition
45. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
First-Degree Price Discrimination (Perfect)
Brand Multiplication
Third-degree price discrimination
No cooperative equilibrium
46. The reward received by a player in a game - such as the profit earned by an oligopolist
Payoff
No cooperative equilibrium
Duopoly
Herfindahl-Hirschman index (HHI)
47. The situation when a firm's long-run average costs fall as it increases output
Reservation Price
Leader
Payoff matrix
Economies of scale
48. Produce identical products
Nonprime competition
Economies of scale
Perfect Competitor Characteristics
Cutthroat Competition
49. 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
Bargaining Power of Suppliers
Import competition
Inefficiency
Patent
50. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Dominant strategy
Common knowledge
Price war
Duopoly