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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. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Strategic behavior
Lerner index
Randomized pricing
Commodity bundling
2. 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
Unbalanced Oligopoly
Fair return price
Contestable market
Duopoly
3. Rules - strategies - payoffs - outcomes
Tacit collusion
What is game?
Perfect Competitor Making a Profit
Two-part Tariff Method of Pricing
4. Revenue-Costs
Perfect Competition Barriers to Entry
Covert Collusion
Prisoners' dilemma
Profit
5. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Concentration Ratio
Repeated game
Unbalanced Oligopoly
Duopoly
6. Keeps the price just where it is to maximize profit
Payoff table
Cutthroat Competition
Equilibrium
Non-cooperative behavior
7. 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
Leader
Perfect Competition Long Run Supply
Second-Degree Price Discrimination
Oligopoly
8. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Peak-load pricing
Payoff matrix
Covert Collusion
Inefficiency
9. 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
Non-price competition
Dominant firm oligopoly
Vertical Merger
Unbalanced Oligopoly
10. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Transfer pricing
Reservation Price
Nash equilibrium
One-shot game
11. A strategy or action that always provides the best outcome no matter what decisions rivals make
Inefficiency
Import competition
Dominant strategy
Common knowledge
12. Involves price-fixing
Commodity bundling
Covert Collusion
Inter-industry competition
Ownership of a Key Input
13. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Barrier to entry
Non-cooperative behavior
Competitive market
Empty threat
14. 1/(1+i)n
Present Value (PV)
Perfect Competition (characteristics)
Homogenous oligopoly
Cheating
15. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Vertical Merger
Cheating
Leader
Competitive market
16. 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
Subgame perfect equilibrium
Maximizing profit in Oligopoly games
Pure monopoly
Price Leadership
17. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Joint Venture
Sequential game
Leader
18. A simpler way to operationalize first-degree price discrimination
Differentiated oligopoly
Two-part Tariff Method of Pricing
Simultaneous decision games
Market Structure
19. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
One-shot game
Inter-industry competition
Dominant firm oligopoly
Rent-seeking behavior
20. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Vertical Merger
Imperfect competition
Leader
Fair return price
21. In game theory - a decision rule that describes the actions a player will take at each decision point
Monopoly (characteristics)
Strategy
Monopolistic Competition
Subgame perfect equilibrium
22. 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
Credible threat
Bertrand oligopoly
Dominant firm oligopoly
Lerner index
23. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Minimum efficient scale (full capacity)
Two-part pricing
Bargaining Power of Suppliers
Primary Sources of Monopolistic Power
24. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Bargaining Power of Buyers
Common knowledge
Cournot equilibrium
Oligopoly
25. 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
Non-cooperative equilibrium
Secure strategy
Perfect Competitor Characteristics
The Threat from Potential Entrants Firms
26. When the decisions of two or more firms significantly affect each others' profits
Interdependence
Monopoly (characteristics)
Market
Second-Degree Price Discrimination
27. 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
Imperfect competition
Present Value (PV)
Cheating
Limit pricing
28. 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
Subgame perfect equilibrium
Sweezy oligopoly
Market Structure
Conglomerate Merger
29. 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
Bargaining Power of Suppliers
Interdependence
Reservation Price
30. 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
Mixed (randomized) strategy
Oligopoly
Price Leadership
31. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Monopoly (characteristics)
Simultaneous consumption
Collusion
Non-cooperative equilibrium
32. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Product differentiation
Undifferentiated
Payoff
Socially optimal price
33. 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
Dansby-Willig performance index
Product differentiation
Brand Multiplication
Monopolistic Competition
34. Both players have dominant strategies and play them
Dominant strategy equilibrium
Perfect Competitor Characteristics
Mutual interdependence
Leader
35. Actions taken by a firm to achieve a goal - such as maximizing profits
Business strategy
Socially optimal price
Commodity bundling
Network effects
36. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Third-Degree Price Discrimination
Interdependence
Present Value (PV)
Monopolistic Characteristics:
37. A situation in which neither firm has incentive to change its output given the other firm's output
Socially optimal price
Cournot equilibrium
Present Value (PV)
Limit pricing
38. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
First-Degree Price Discrimination (Perfect)
Perfect Competitor Making a Profit
Perfect Competition (characteristics)
Limit pricing
39. 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 firm oligopoly
Bertrand oligopoly
Business strategy
Empty threat
40. 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
Dominant strategy
Non-rivalrous consumption
Repeated game
41. 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
Four-firm concentration ratio
Mutual Interdependence
Implicit Collusion
Block pricing
42. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Lerner index
No cooperative equilibrium
The Threat from Potential Entrants Firms
Homogenous oligopoly
43. When a manager makes a noncooperative decision
Third-Degree Price Discrimination
Dominant firm oligopoly
Cheating
Prisoners' dilemma
44. First firm to set its output (Stackelberg's model)
Cheating
Leader
Import competition
Double marginalization
45. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Payoff table
Transfer pricing
Cooperation
What is game?
46. Face competition from companies that currently are not in the market but might enter
Simultaneous decision games
The Threat from Potential Entrants Firms
Trigger strategy
Perfect Competitor Making a Profit
47. Steel - autos - colas - airlines
Perfect Competitor Making a Profit
Examples of Oligopoly
Reservation Price
Tacit collusion
48. The smallest quantity at which the average cost curve reaches its minimum
Undifferentiated
Minimum efficient scale (full capacity)
Perfect Competitor Making a Profit
Brand Multiplication
49. 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
Sweezy oligopoly
Two-part Tariff Method of Pricing
Mutual Interdependence
Implicit Collusion
50. A product's ability to satisfy a large number of consumers at the same time
Dominant strategy
Finding profit for oligopoly games
What is game?
Simultaneous consumption