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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. Involves price-fixing
Covert Collusion
Examples of Monopolistic Competition
Perfect Competition (characteristics)
Sweezy oligopoly
2. A strategy that guarantees the highest payoff given the worst possible scenario
Cooperation
Secure strategy
Dominant firm oligopoly
Reservation Price
3. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level
Unbalanced Oligopoly
Market
Finding profit for oligopoly games
Double marginalization
4. Cooperation among firms that does not involve an explicit agreement
The Threat from Potential Entrants Firms
Open Collusion
Tacit collusion
Imperfect competition
5. The exclusive right to a product for a period of 20 years from the date the product is invented
Limit price
Mutual Interdependence
Dominant firm oligopoly
Patent
6. The reward received by a player in a game - such as the profit earned by an oligopolist
Payoff
Normal-form game
Monopoly (characteristics)
Price Leadership
7. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Product Differentiation
Cooperative equilibrium
Bargaining Power of Suppliers
Inefficiency
8. An oligopoly in which the firms produce a standardized product
The Threat from Potential Entrants Firms
Homogenous oligopoly
Undifferentiated
Rent-seeking behavior
9. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Contestable market
Non-rivalrous consumption
Duopoly
Bertrand oligopoly
10. Increases in the value of a product to each user - including existing users - as the total number of users rises
Oligopoly
Network effects
Dansby-Willig performance index
Implicit Collusion
11. Revenue-Costs
Examples of Monopolistic Competition
Cournot oligopoly
Perfect Competitor Making a Profit
Profit
12. Keeps the price just where it is to maximize profit
Vertical Merger
Maximizing profit in Oligopoly games
Price matching
Cutthroat Competition
13. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Monopoly (characteristics)
Perfect Competition Barriers to Entry
Duopoly
Perfect Competition Short Run Supply
14. 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
Pure monopoly
Non-cooperative equilibrium
Price discrimination
Secure strategy
15. Anything that keeps new firms from entering an industry in which firms are earning economic profits (e.g. Ownership of a Key Input - Capital - Patents - Economies of scale)
Barrier to entry
Third-degree price discrimination
Inter-industry competition
Strategy
16. The derivative of total revenue
Marginal Revenue
Price discrimination
Implicit Collusion
Repeated game
17. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)
Four-firm concentration ratio
Interdependence
Monopolistic Characteristics:
Dansby-Willig performance index
18. An oligopoly in which the firms produce a differentiated product
Dominant strategy equilibrium
Differentiated oligopoly
Cutthroat Competition
Imperfect competition
19. The competition that domestic firms encounter from the products and services of foreign producers
Sweezy oligopoly
Import competition
Vertical Merger
Interdependence
20. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Fair return price
Merger
Payoff matrix
Rent-seeking behavior
21. 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
Third-Degree Price Discrimination
Bargaining Power of Suppliers
Vertical Merger
Bargaining Power of Buyers
22. A firm whose price decisions are tacitly accepted and followed by others in the industry
Cutthroat Competition
Randomized pricing
Price Leadership
Mutual interdependence
23. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Basis for Product Differentiation
What is game?
Strategic behavior
Payoff matrix
24. 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
Basis for Product Differentiation
Mutual interdependence
Interdependence
Sweezy oligopoly
25. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Payoff
Repeated game
Present Value (PV)
26. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Competitive market
Differentiated oligopoly
Payoff matrix
Joint Venture
27. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Joint Venture
Secure strategy
Limit pricing
Price matching
28. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Bargaining Power of Suppliers
Open Collusion
Reservation Price
Lerner index
29. 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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30. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games
Tacit collusion
Herfindahl-Hirschman index (HHI)
Disappearing invisible hand
Two-part pricing
31. The practice of charging different prices to consumers for the same good or service
Cournot oligopoly
Price discrimination
Non-cooperative equilibrium
Rent-seeking behavior
32. A strategy or action that always provides the best outcome no matter what decisions rivals make
Maximizing profit in Oligopoly games
Product Differentiation
High Price Elasticity
Dominant strategy
33. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
What is game?
Bargaining Power of Buyers
Transfer pricing
Price discrimination
34. The physical characteristics of the market within which firms interact
Herfindahl-Hirschman index (HHI)
Market Structure
Present Value (PV)
Product Differentiation
35. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Normal-form game
Unbalanced Oligopoly
Fair return price
Strategic behavior
36. A simpler way to operationalize first-degree price discrimination
Minimum efficient scale (full capacity)
Block pricing
Two-part Tariff Method of Pricing
Normal-form game
37. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Tacit collusion
Third-degree price discrimination
Conglomerate Merger
Collusion
38. Steel - autos - colas - airlines
Fair return price
Examples of Oligopoly
Competitive market
Interdependence
39. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Socially optimal price
One-shot game
No cooperative equilibrium
Unbalanced Oligopoly
40. Marginal cost curve above average variable cost - P* = SRMC
Network effects
Perfect Competition Short Run Supply
Mixed (randomized) strategy
First-Degree Price Discrimination (Perfect)
41. The price that is low enough to deter entry
Market
Limit price
Covert Collusion
Cournot oligopoly
42. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Common knowledge
Prisoner's dilemma
Bargaining Power of Buyers
Tit-for-tat strategy
43. Game in which one player makes a move after observing the other player's move
Sequential-move game
Monopoly (characteristics)
Non-rivalrous consumption
Product differentiation
44. 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
Simultaneous consumption
Cutthroat Competition
Rothschild index
Kinked demand curve model
45. 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
Second-Degree Price Discrimination
Unbalanced Oligopoly
Kinked demand curve model
Oligopoly
46. An equilibrium in a game in which players cooperate to increase their mutual payoff
Cooperative equilibrium
Contestable market
Examples of Monopolistic Competition
Open Collusion
47. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Tit-for-tat strategy
Stackelberg oligopoly
Vertical Merger
48. Both players have dominant strategies and play them
Normal-form game
Cheating
Dominant strategy equilibrium
Two-part pricing
49. 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
Network effects
Two-part pricing
Strategic behavior
Kinked-demand curve
50. 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
First-Degree Price Discrimination (Perfect)
Socially optimal price
Competitive market
Mixed (randomized) strategy