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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. Identical or substitutable
Secure strategy
Merger
Prisoners' dilemma
Undifferentiated
2. 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
Undifferentiated
Trigger strategy
Perfect Competitor Making a Profit
Dominant firm oligopoly
3. 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
Disappearing invisible hand
Oligopoly
Equilibrium
Payoff
4. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Follower
Covert Collusion
Primary Sources of Monopolistic Power
Dansby-Willig performance index
5. An oligopoly in which the firms produce a standardized product
Subgame perfect equilibrium
Equilibrium
Cutthroat Competition
Homogenous oligopoly
6. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Unbalanced Oligopoly
Implicit Collusion
Contestable market
7. 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)
What is game?
Follower
Two-part pricing
Four-firm concentration ratio
8. 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
Examples of Oligopoly
Perfect Competition Short Run Supply
Empty threat
Bertrand oligopoly
9. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Examples of Oligopoly
Mutual interdependence
Lerner index
10. A representation of a game that summarizes the players - the information available to them at each stage - the strategies available to them - the sequence of moves - and the payoffs resulting from alternative strategies
Randomized pricing
Trigger strategy
Extensive-form game
Interdependence
11. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Profit
Fair return price
Simultaneous consumption
Minimum efficient scale (full capacity)
12. In game theory - a game that is played again sometime after the previous game ends
Merger
Repeated game
Perfect Competitor Making a Profit
Sequential-move game
13. 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
Cheating
Credible threat
Differentiated oligopoly
Limit pricing
14. Variations on one good so that a firm can increase market sharea
Brand Multiplication
Follower
Perfect Competition Barriers to Entry
Marginal Revenue
15. Produce identical products
Cournot equilibrium
Perfect Competitor Characteristics
Basis for Product Differentiation
Inefficiency
16. 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
Socially optimal price
Third-degree price discrimination
Dansby-Willig performance index
Homogenous oligopoly
17. Rival who sets its output after the leader (Stackelberg's model)
Bargaining Power of Buyers
Follower
Mixed (randomized) strategy
Price matching
18. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Perfect Competitor Characteristics
Randomized pricing
Two-part Tariff Method of Pricing
Kinked-demand curve
19. 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
Prisoner's dilemma
Strategic behavior
Reservation Price
20. Both players have dominant strategies and play them
Dominant strategy equilibrium
Block pricing
Mixed (randomized) strategy
Finding profit for oligopoly games
21. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Payoff matrix
Mutual Interdependence
Implicit Collusion
High Price Elasticity
22. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Dansby-Willig performance index
Horizontal Merger/Integration
Limit pricing
Prisoners' dilemma
23. Long-run marginal cost curve above long-run average cost
Perfect Competition Short Run Supply
Bargaining Power of Buyers
Marginal Revenue
Perfect Competition Long Run Supply
24. 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
Double marginalization
Maximizing profit in Oligopoly games
Third-degree price discrimination
25. 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
Cournot oligopoly
Horizontal Merger/Integration
Prisoners' dilemma
Monopoly (characteristics)
26. A situation in which a change in price strategy by one firm affects sales and profits of another
Cooperative equilibrium
Mutual interdependence
Common knowledge
Merger
27. When a manager makes a noncooperative decision
Mixed (randomized) strategy
Inter-industry competition
Cheating
Dominant firm oligopoly
28. Using advertising and other means to try to increase a firm's sales
Limit pricing
Examples of Monopolistic Competition
Non-price competition
Network effects
29. An equilibrium in a game in which players cooperate to increase their mutual payoff
Cooperative equilibrium
Simultaneous decision games
Kinked demand curve model
Sweezy oligopoly
30. 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
Monopoly (characteristics)
Two-part Tariff Method of Pricing
Present Value (PV)
Finding profit for oligopoly games
31. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Perfect Competition Short Run Supply
Limit pricing
Herfindahl-Hirschman index (HHI)
32. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Cheating
Cooperation
Non-price competition
Peak-load pricing
33. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Economies of scale
Dominant strategy
First-mover advantage
34. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Concentration Ratio
Imperfect competition
Non-rivalrous consumption
Empty threat
35. Cooperation among firms that does not involve an explicit agreement
Tacit collusion
Differentiated oligopoly
Tit-for-tat strategy
Four-firm concentration ratio
36. 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
Vertical Merger
Sweezy oligopoly
Conglomerate Merger
Nonprime competition
37. 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
Differentiated oligopoly
Price war
Perfect Competitor Characteristics
38. 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
Inter-industry competition
Horizontal Merger/Integration
Lerner index
Block pricing
39. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Transfer pricing
Monopolistic Competition
Unbalanced Oligopoly
Product Differentiation
40. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Rothschild index
Stackelberg oligopoly
Contestable market
Indefinitely repeated game
41. 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
Lerner index
Mutual Interdependence
First-mover advantage
Business strategy
42. A combination of two or more companies into one company
Examples of Monopolistic Competition
Merger
Strategy
Concentration Ratio
43. 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
Reservation Price
Contestable market
Differentiated oligopoly
First-Degree Price Discrimination (Perfect)
44. 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
Collusion
Dansby-Willig performance index
Fair return price
Two-part pricing
45. 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
Bargaining Power of Suppliers
First-Degree Price Discrimination (Perfect)
Dansby-Willig performance index
Dominant strategy equilibrium
46. A strategy that guarantees the highest payoff given the worst possible scenario
Secure strategy
Brand Multiplication
Tacit collusion
Two-part pricing
47. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Non-price competition
Two-part pricing
Limit price
Third-Degree Price Discrimination
48. The price that is low enough to deter entry
Minimum efficient scale (full capacity)
Commodity bundling
Limit price
Lerner index
49. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
The Threat from Potential Entrants Firms
Mixed (randomized) strategy
Primary Sources of Monopolistic Power
Four-firm concentration ratio
50. 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
Cross-subsidy pricing
Kinked-demand curve
Third-degree price discrimination
Subgame perfect equilibrium