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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. Actions taken by firms to plan for and react to competition from rival firms
Market
Mutual Interdependence
Strategic behavior
Market Structure
2. 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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3. 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
Leader
Dominant firm oligopoly
Tacit collusion
4. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Secure strategy
Price war
Import competition
Repeated game
5. Demand line is above ATC curve
Business strategy
Tit-for-tat strategy
Cooperation
Perfect Competitor Making a Profit
6. 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
Unbalanced Oligopoly
Monopolistic Competition
Trigger strategy
Reservation Price
7. 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
Maximizing profit in Oligopoly games
Product Differentiation
Price war
Bertrand oligopoly
8. The physical characteristics of the market within which firms interact
Non-rivalrous consumption
Price matching
Inter-industry competition
Market Structure
9. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Strategy
Product Differentiation
Natural Monopoly (local phone or electric company)
Primary Sources of Monopolistic Power
10. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Maximizing profit in Oligopoly games
Randomized pricing
Equilibrium
Horizontal Merger/Integration
11. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase
Kinked-demand curve
Herfindahl-Hirschman index (HHI)
Strategic behavior
Conglomerate Merger
12. The practice of charging different prices to consumers for the same good or service
Tacit collusion
Price discrimination
Mutual Interdependence
Product differentiation
13. Marginal cost curve above average variable cost - P* = SRMC
Perfect Competition Short Run Supply
Collusion
Repeated game
Tacit collusion
14. 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)
Stackelberg oligopoly
Nonprime competition
Monopolistic Competition
Price war
15. Steel - autos - colas - airlines
Payoff table
Examples of Oligopoly
Sweezy oligopoly
Basis for Product Differentiation
16. Maximize economic profit by producing the quantity at which MC=MR
Cooperation
Maximizing profit in Oligopoly games
Extensive-form game
Transfer pricing
17. Rules - strategies - payoffs - outcomes
Secure strategy
Cheating
Disappearing invisible hand
What is game?
18. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Empty threat
Business strategy
Market
Strategic behavior
19. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Rent-seeking behavior
High Price Elasticity
Transfer pricing
Duopoly
20. Price Sensitive
High Price Elasticity
Marginal Revenue
Perfect Competitor Characteristics
Implicit Collusion
21. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Inter-industry competition
First-Degree Price Discrimination (Perfect)
Payoff matrix
Cooperation
22. Revenue-Costs
Open Collusion
Price war
Profit
Fair return price
23. The derivative of total revenue
Present Value (PV)
Marginal Revenue
Mixed (randomized) strategy
Leader
24. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Product Differentiation
Inefficiency
Second-Degree Price Discrimination
Randomized pricing
25. When a manager makes a noncooperative decision
Repeated game
Finding profit for oligopoly games
Cheating
What is game?
26. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Rent-seeking behavior
First-Degree Price Discrimination (Perfect)
Tit-for-tat strategy
Cournot oligopoly
27. 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
Fair return price
Maximizing profit in Oligopoly games
28. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Dominant strategy equilibrium
Monopoly (characteristics)
Present Value (PV)
Leader
29. The exclusive right to a product for a period of 20 years from the date the product is invented
Competitive market
Cournot oligopoly
Patent
Third-degree price discrimination
30. Identical or substitutable
Market
Undifferentiated
Two-part pricing
Double marginalization
31. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Block pricing
Finding profit for oligopoly games
Bargaining Power of Buyers
Maximizing profit in Oligopoly games
32. 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
Vertical Merger
Covert Collusion
Indefinitely repeated game
33. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Herfindahl-Hirschman index (HHI)
Cheating
Conglomerate Merger
Block pricing
34. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Payoff matrix
Leader
Simultaneous decision games
Fair return price
35. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Payoff
Bargaining Power of Buyers
Oligopoly
Inefficiency
36. The competition that domestic firms encounter from the products and services of foreign producers
Cross-subsidy pricing
Import competition
No cooperative equilibrium
Primary Sources of Monopolistic Power
37. A situation in which no one wants to change his or her behavior
Equilibrium
Tacit collusion
What is game?
Inefficiency
38. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Vertical Merger
Fair return price
Rent-seeking behavior
Tacit collusion
39. 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
Repeated game
Price war
Lerner index
Joint Venture
40. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Strategic behavior
Nonprime competition
Inter-industry competition
Secure strategy
41. 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
Third-Degree Price Discrimination
Contestable market
Finding profit for oligopoly games
Sequential-move game
42. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Joint Venture
Simultaneous decision games
Import competition
Duopoly
43. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Limit price
Sequential game
Payoff matrix
Homogenous oligopoly
44. The practice of bundling several different products together and selling them at a single "bundle" price
Randomized pricing
Undifferentiated
Commodity bundling
Common knowledge
45. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Merger
Simultaneous decision games
Conglomerate Merger
Payoff table
46. A combination of two or more companies into one company
Cutthroat Competition
Simultaneous consumption
Payoff
Merger
47. 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)
Four-firm concentration ratio
Normal-form game
Examples of Oligopoly
Second-Degree Price Discrimination
48. Ignoring the effects of their actions on each others' profits
Perfect Competitor Making a Profit
Sweezy oligopoly
Normal-form game
Non-cooperative behavior
49. A strategy or action that always provides the best outcome no matter what decisions rivals make
Tacit collusion
Dominant strategy
Rothschild index
First-Degree Price Discrimination (Perfect)
50. 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
Nonprime competition
Herfindahl-Hirschman index (HHI)
Sweezy oligopoly
Price matching