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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. Increases in the value of a product to each user - including existing users - as the total number of users rises
Network effects
Sequential-move game
First-Degree Price Discrimination (Perfect)
Simultaneous decision games
2. 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
Repeated game
Bertrand oligopoly
Contestable market
Kinked demand curve model
3. Both players have dominant strategies and play them
Payoff table
Dominant strategy equilibrium
Mutual interdependence
Prisoner's dilemma
4. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Payoff matrix
Dansby-Willig performance index
Non-rivalrous consumption
Credible threat
5. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Simultaneous consumption
Cooperation
Peak-load pricing
Socially optimal price
6. Steel - autos - colas - airlines
Pure monopoly
Examples of Oligopoly
Collusion
Oligopoly
7. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Block pricing
Nash equilibrium
Fair return price
Conglomerate Merger
8. Using advertising and other means to try to increase a firm's sales
Credible threat
Vertical Merger
Non-price competition
Non-cooperative equilibrium
9. In game theory - a decision rule that describes the actions a player will take at each decision point
Payoff matrix
Strategy
Economies of scale
Normal-form game
10. The situation when a firm's long-run average costs fall as it increases output
Economies of scale
Second-Degree Price Discrimination
Price matching
Two-part pricing
11. 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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12. The practice of bundling several different products together and selling them at a single "bundle" price
Commodity bundling
Nash equilibrium
Prisoner's dilemma
Imperfect competition
13. Rules - strategies - payoffs - outcomes
What is game?
Price matching
Limit pricing
Imperfect competition
14. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Price war
Limit pricing
Tacit collusion
Common knowledge
15. 1/(1+i)n
Brand Multiplication
Double marginalization
Market
Present Value (PV)
16. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Dansby-Willig performance index
Collusion
Transfer pricing
Price matching
17. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Inter-industry competition
Examples of Monopolistic Competition
Product Differentiation
Monopoly (characteristics)
18. 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
Bargaining Power of Buyers
Open Collusion
Cournot oligopoly
Sequential-move game
19. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Credible threat
Duopoly
Dominant firm oligopoly
Network effects
20. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Third-Degree Price Discrimination
Marginal Revenue
Merger
Reservation Price
21. A strategy that guarantees the highest payoff given the worst possible scenario
Strategic behavior
Homogenous oligopoly
Secure strategy
Open Collusion
22. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Common knowledge
Imperfect competition
Barrier to entry
Double marginalization
23. The competition that domestic firms encounter from the products and services of foreign producers
Undifferentiated
Vertical Merger
Perfect Competitor Making a Profit
Import competition
24. Revenue-Costs
Simultaneous decision games
Nonprime competition
Profit
Strategic behavior
25. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Mutual Interdependence
Equilibrium
Unbalanced Oligopoly
Lerner index
26. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Inefficiency
Rent-seeking behavior
Simultaneous consumption
Trigger strategy
27. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Open Collusion
Indefinitely repeated game
Perfect Competitor Making a Profit
Tacit collusion
28. Actions taken by firms to plan for and react to competition from rival firms
Non-cooperative behavior
Cooperative equilibrium
Competitive market
Strategic behavior
29. Toothpaste - shampoo - restaurants - banks
Price matching
What is game?
Product differentiation
Examples of Monopolistic Competition
30. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Joint Venture
Limit pricing
Dominant firm oligopoly
Price Leadership
31. Cooperation among firms that does not involve an explicit agreement
Nonprime competition
First-Degree Price Discrimination (Perfect)
Socially optimal price
Tacit collusion
32. 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
Price war
Primary Sources of Monopolistic Power
Marginal Revenue
33. 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
Credible threat
Contestable market
Limit pricing
Unbalanced Oligopoly
34. Long-run marginal cost curve above long-run average cost
Price discrimination
Covert Collusion
Perfect Competition Long Run Supply
Stackelberg oligopoly
35. A firm whose price decisions are tacitly accepted and followed by others in the industry
Price Leadership
What is game?
One-shot game
Product Differentiation
36. A combination of two or more companies into one company
Nash equilibrium
Indefinitely repeated game
Merger
Dansby-Willig performance index
37. Variations on one good so that a firm can increase market sharea
Brand Multiplication
Limit pricing
Empty threat
Payoff matrix
38. One large firm that has a significant cost advantage over many other - smaller competing firms; -the large firm operates as a monopoly: setting price and output to maximize profit; -the small firms act as perfect competitors: taking as given the mar
Homogenous oligopoly
Basis for Product Differentiation
One-shot game
Dominant firm oligopoly
39. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Mutual interdependence
The Threat from Potential Entrants Firms
Implicit Collusion
40. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Duopoly
Profit
Sequential game
Tit-for-tat strategy
41. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Mixed (randomized) strategy
Cross-subsidy pricing
Block pricing
Trigger strategy
42. 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
Oligopoly
Barrier to entry
Cooperative equilibrium
Peak-load pricing
43. An equilibrium in a game in which players cooperate to increase their mutual payoff
Simultaneous-move game
Network effects
Cooperative equilibrium
Double marginalization
44. Game in which one player makes a move after observing the other player's move
First-mover advantage
Sequential-move game
Herfindahl-Hirschman index (HHI)
What is game?
45. Set marginal cost for the cartel equal to marginal revenue for the cartel; -cartel's marginal cost curve is the horizontal sum of the MC curves of the two firms; -Marginal revenue curve is like that of a monopoly
Finding profit for oligopoly games
Perfect Competitor Making a Profit
Empty threat
Dominant strategy equilibrium
46. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Prisoner's dilemma
Conglomerate Merger
Payoff matrix
Present Value (PV)
47. The practice of charging different prices to consumers for the same good or service
Import competition
Limit pricing
Cournot equilibrium
Price discrimination
48. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Stackelberg oligopoly
Dansby-Willig performance index
First-mover advantage
Kinked-demand curve
49. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Common knowledge
Nash equilibrium
Business strategy
50. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Non-cooperative behavior
Network effects
No cooperative equilibrium
Maximizing profit in Oligopoly games