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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. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Limit pricing
What is game?
Nonprime competition
Product differentiation
2. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Non-cooperative equilibrium
Simultaneous decision games
Cooperation
Bargaining Power of Buyers
3. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased
Profit
Two-part pricing
Market
Market Structure
4. Identical or substitutable
Undifferentiated
Randomized pricing
Bargaining Power of Suppliers
Concentration Ratio
5. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Nash equilibrium
Nonprime competition
Oligopoly
Natural Monopoly (local phone or electric company)
6. Takes Place inside the Mind of the consumer
Rent-seeking behavior
Product Differentiation
What is game?
Limit price
7. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Duopoly
Rent-seeking behavior
Sequential game
Cross-subsidy pricing
8. A situation in which neither firm has incentive to change its output given the other firm's output
Cournot equilibrium
Limit pricing
Non-cooperative behavior
Normal-form game
9. In game theory - a game that is played again sometime after the previous game ends
Finding profit for oligopoly games
Repeated game
Limit pricing
Kinked demand curve model
10. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Trigger strategy
Secure strategy
Implicit Collusion
Leader
11. 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
Basis for Product Differentiation
Maximizing profit in Oligopoly games
Mutual interdependence
Socially optimal price
12. Face competition from companies that currently are not in the market but might enter
Repeated game
Reservation Price
The Threat from Potential Entrants Firms
Homogenous oligopoly
13. The competition that domestic firms encounter from the products and services of foreign producers
Price matching
Common knowledge
Inter-industry competition
Import competition
14. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Conglomerate Merger
Commodity bundling
Oligopoly
Non-rivalrous consumption
15. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Present Value (PV)
Imperfect competition
Dominant strategy
Maximizing profit in Oligopoly games
16. 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
Finding profit for oligopoly games
Extensive-form game
Horizontal Merger/Integration
Monopolistic Competition
17. Both players have dominant strategies and play them
Dominant strategy equilibrium
Trigger strategy
Product differentiation
Cooperative equilibrium
18. Actions taken by a firm to achieve a goal - such as maximizing profits
Business strategy
Profit
Unbalanced Oligopoly
Perfect Competition (characteristics)
19. Produce identical products
Perfect Competitor Characteristics
Cournot equilibrium
Limit price
Two-part pricing
20. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Indefinitely repeated game
Reservation Price
Simultaneous-move game
Sequential game
21. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Dansby-Willig performance index
First-Degree Price Discrimination (Perfect)
Cooperative equilibrium
Fair return price
22. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Interdependence
Primary Sources of Monopolistic Power
Finding profit for oligopoly games
Monopoly (characteristics)
23. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Mutual interdependence
Non-rivalrous consumption
Indefinitely repeated game
Block pricing
24. Variations on one good so that a firm can increase market sharea
Product Differentiation
Price discrimination
Brand Multiplication
Limit price
25. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Limit pricing
Normal-form game
Inefficiency
Oligopoly
26. Revenue-Costs
Examples of Monopolistic Competition
Profit
Dansby-Willig performance index
Non-price competition
27. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Cooperation
Perfect Competitor Making a Profit
Payoff matrix
Strategy
28. 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
Kinked demand curve model
Kinked-demand curve
Dominant firm oligopoly
Subgame perfect equilibrium
29. The practice of bundling several different products together and selling them at a single "bundle" price
Basis for Product Differentiation
Payoff table
Commodity bundling
Brand Multiplication
30. 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
Dominant firm oligopoly
Non-cooperative equilibrium
What is game?
Block pricing
31. The derivative of total revenue
Non-cooperative behavior
Monopoly (characteristics)
Horizontal Merger/Integration
Marginal Revenue
32. Long-run marginal cost curve above long-run average cost
The Threat from Potential Entrants Firms
Cournot equilibrium
Perfect Competition Long Run Supply
First-Degree Price Discrimination (Perfect)
33. 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
Payoff
Block pricing
First-mover advantage
Primary Sources of Monopolistic Power
34. When a manager makes a noncooperative decision
Market Structure
Cheating
Payoff
Simultaneous decision games
35. Rules - strategies - payoffs - outcomes
Non-cooperative equilibrium
What is game?
Collusion
Unbalanced Oligopoly
36. Actions taken by firms to plan for and react to competition from rival firms
Extensive-form game
Open Collusion
Covert Collusion
Strategic behavior
37. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Nonprime competition
Common knowledge
Simultaneous consumption
Empty threat
38. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Two-part pricing
Kinked demand curve model
Inefficiency
39. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Cournot oligopoly
Basis for Product Differentiation
Fair return price
Cutthroat Competition
40. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Trigger strategy
Sequential game
Leader
Unbalanced Oligopoly
41. An oligopoly in which the firms produce a standardized product
Homogenous oligopoly
Strategy
Common knowledge
Examples of Monopolistic Competition
42. The physical characteristics of the market within which firms interact
Non-price competition
Tit-for-tat strategy
Equilibrium
Market Structure
43. An oligopoly in which the firms produce a differentiated product
Competitive market
Differentiated oligopoly
Profit
Common knowledge
44. Cooperation among firms that does not involve an explicit agreement
Joint Venture
Tacit collusion
Cutthroat Competition
Equilibrium
45. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Perfect Competition (characteristics)
Transfer pricing
Imperfect competition
Open Collusion
46. 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
Minimum efficient scale (full capacity)
Joint Venture
Network effects
Duopoly
47. 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"
Brand Multiplication
Horizontal Merger/Integration
Credible threat
Collusion
48. The reward received by a player in a game - such as the profit earned by an oligopolist
Payoff
Tit-for-tat strategy
Mutual interdependence
Market Structure
49. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Mixed (randomized) strategy
Dominant strategy equilibrium
Vertical Merger
Sweezy oligopoly
50. 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
Credible threat
Imperfect competition
Non-cooperative behavior
Oligopoly