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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. 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
Stackelberg oligopoly
Herfindahl-Hirschman index (HHI)
Kinked demand curve model
Contestable market
2. In game theory - benefit obtained by party that moves first in a sequential game
Non-cooperative equilibrium
Sweezy oligopoly
Patent
First-mover advantage
3. Simultaneous move game that is not repeated
One-shot game
Price discrimination
Non-rivalrous consumption
Ownership of a Key Input
4. 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"
Joint Venture
Socially optimal price
Credible threat
Finding profit for oligopoly games
5. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Product differentiation
Nash equilibrium
Subgame perfect equilibrium
Peak-load pricing
6. Rules - strategies - payoffs - outcomes
Interdependence
Market Structure
Prisoners' dilemma
What is game?
7. 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
Simultaneous-move game
Cutthroat Competition
Extensive-form game
8. 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
Homogenous oligopoly
Non-cooperative equilibrium
Bargaining Power of Suppliers
Limit pricing
9. A strategy that guarantees the highest payoff given the worst possible scenario
Simultaneous decision games
Ownership of a Key Input
Secure strategy
First-Degree Price Discrimination (Perfect)
10. 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
The Threat from Potential Entrants Firms
Simultaneous-move game
Nash equilibrium
Oligopoly
11. In game theory - a game that is played again sometime after the previous game ends
Repeated game
Nash equilibrium
Monopolistic Characteristics:
Price Leadership
12. 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
The Threat from Potential Entrants Firms
Joint Venture
Import competition
No cooperative equilibrium
13. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Second-Degree Price Discrimination
Present Value (PV)
Cournot equilibrium
High Price Elasticity
14. The practice of charging different prices to consumers for the same good or service
Price discrimination
Mutual interdependence
Cooperation
Lerner index
15. 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
Bertrand oligopoly
Third-Degree Price Discrimination
Network effects
Marginal Revenue
16. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Cooperation
Normal-form game
Cheating
Contestable market
17. 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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18. 1/(1+i)n
Economies of scale
Competitive market
Present Value (PV)
Payoff matrix
19. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination
Limit price
Perfect Competition Short Run Supply
Payoff table
Repeated game
20. Maximize economic profit by producing the quantity at which MC=MR
Maximizing profit in Oligopoly games
Examples of Oligopoly
Horizontal Merger/Integration
Disappearing invisible hand
21. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Collusion
Cournot equilibrium
Market
Reservation Price
22. The competition for sales between the products of one industry and the products of another industry
Bargaining Power of Suppliers
Payoff
Non-price competition
Inter-industry competition
23. 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
Disappearing invisible hand
Monopolistic Characteristics:
Examples of Oligopoly
Finding profit for oligopoly games
24. A firm whose price decisions are tacitly accepted and followed by others in the industry
Lerner index
Tit-for-tat strategy
Market Structure
Price Leadership
25. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Nonprime competition
Dominant firm oligopoly
Simultaneous consumption
Cheating
26. 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
Finding profit for oligopoly games
Payoff table
27. A situation in which no one wants to change his or her behavior
Examples of Oligopoly
Rothschild index
Equilibrium
Concentration Ratio
28. 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
Vertical Merger
Follower
Joint Venture
29. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Unbalanced Oligopoly
Duopoly
Rent-seeking behavior
Rothschild index
30. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Strategic behavior
Vertical Merger
Second-Degree Price Discrimination
Monopoly (characteristics)
31. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Credible threat
Monopolistic Competition
Lerner index
Collusion
32. Actions taken by firms to plan for and react to competition from rival firms
Strategic behavior
Simultaneous decision games
Product differentiation
Cournot equilibrium
33. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Peak-load pricing
Finding profit for oligopoly games
Product differentiation
Dansby-Willig performance index
34. A strategy or action that always provides the best outcome no matter what decisions rivals make
Undifferentiated
Monopolistic Characteristics:
Dominant strategy
Contestable market
35. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy
Sequential game
Nash equilibrium
Dominant strategy equilibrium
Second-Degree Price Discrimination
36. Steel - autos - colas - airlines
Covert Collusion
Follower
Examples of Oligopoly
Sequential-move game
37. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Bargaining Power of Buyers
Natural Monopoly (local phone or electric company)
Mutual interdependence
Extensive-form game
38. 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
Stackelberg oligopoly
Trigger strategy
Secure strategy
Randomized pricing
39. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Non-price competition
Price war
Dominant strategy
Monopolistic Competition
40. 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
Contestable market
Dominant strategy
Limit pricing
Nonprime competition
41. 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)
Patent
Price war
The Threat from Potential Entrants Firms
Stackelberg oligopoly
42. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Product Differentiation
Examples of Oligopoly
First-Degree Price Discrimination (Perfect)
No cooperative equilibrium
43. Both players have dominant strategies and play them
Dominant strategy equilibrium
Imperfect competition
Price war
Economies of scale
44. If production of a good requires a particular input - then control of that input can be a barrier to entry
Perfect Competition Barriers to Entry
Ownership of a Key Input
Kinked demand curve model
Bargaining Power of Suppliers
45. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
First-mover advantage
Perfect Competition (characteristics)
Basis for Product Differentiation
Disappearing invisible hand
46. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Prisoners' dilemma
Merger
Third-degree price discrimination
Extensive-form game
47. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
First-Degree Price Discrimination (Perfect)
Economies of scale
Network effects
48. 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
Mutual Interdependence
Natural Monopoly (local phone or electric company)
Non-rivalrous consumption
Limit pricing
49. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Follower
First-mover advantage
Randomized pricing
Four-firm concentration ratio
50. The smallest quantity at which the average cost curve reaches its minimum
Minimum efficient scale (full capacity)
Equilibrium
Common knowledge
Dominant firm oligopoly