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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. Demand line is above ATC curve
Business strategy
Conglomerate Merger
Perfect Competitor Making a Profit
Payoff
2. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Mutual interdependence
Homogenous oligopoly
Limit pricing
Economies of scale
3. 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
Simultaneous-move game
Dominant strategy
Bargaining Power of Buyers
Sweezy oligopoly
4. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Third-Degree Price Discrimination
Homogenous oligopoly
Duopoly
Sequential game
5. A firm whose price decisions are tacitly accepted and followed by others in the industry
Monopoly (characteristics)
Third-Degree Price Discrimination
Price Leadership
Perfect Competition (characteristics)
6. Using advertising and other means to try to increase a firm's sales
Reservation Price
Contestable market
Primary Sources of Monopolistic Power
Non-price competition
7. Variations on one good so that a firm can increase market sharea
Dominant strategy
Extensive-form game
Brand Multiplication
Cournot oligopoly
8. Takes Place inside the Mind of the consumer
Perfect Competition (characteristics)
Dominant strategy
Perfect Competition Short Run Supply
Product Differentiation
9. An oligopoly in which the firms produce a standardized product
Concentration Ratio
Sequential game
Homogenous oligopoly
Prisoner's dilemma
10. Toothpaste - shampoo - restaurants - banks
Perfect Competition Long Run Supply
Examples of Monopolistic Competition
Indefinitely repeated game
Examples of Oligopoly
11. If production of a good requires a particular input - then control of that input can be a barrier to entry
Rent-seeking behavior
Bargaining Power of Buyers
Natural Monopoly (local phone or electric company)
Ownership of a Key Input
12. Rules - strategies - payoffs - outcomes
Mutual Interdependence
What is game?
Payoff matrix
Third-Degree Price Discrimination
13. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase
Kinked-demand curve
Product Differentiation
The Threat from Potential Entrants Firms
Economies of scale
14. In game theory - a game that is played again sometime after the previous game ends
Normal-form game
Repeated game
Sequential game
Price matching
15. The exclusive right to a product for a period of 20 years from the date the product is invented
Homogenous oligopoly
Patent
Transfer pricing
Cooperation
16. The physical characteristics of the market within which firms interact
Covert Collusion
Price Leadership
Market Structure
Trigger strategy
17. 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
Mixed (randomized) strategy
Tacit collusion
Cournot equilibrium
Bertrand oligopoly
18. Actions taken by a firm to achieve a goal - such as maximizing profits
Four-firm concentration ratio
Joint Venture
Business strategy
Cournot oligopoly
19. 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)
First-Degree Price Discrimination (Perfect)
Strategic behavior
Four-firm concentration ratio
Non-cooperative equilibrium
20. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Simultaneous decision games
Payoff matrix
Undifferentiated
Empty threat
21. Game in which one player makes a move after observing the other player's move
Herfindahl-Hirschman index (HHI)
Strategy
Sequential-move game
Sweezy oligopoly
22. Increases in the value of a product to each user - including existing users - as the total number of users rises
Mutual Interdependence
Sequential-move game
Network effects
Prisoner's dilemma
23. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Tacit collusion
Perfect Competition Short Run Supply
Maximizing profit in Oligopoly games
Indefinitely repeated game
24. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Dominant strategy
Network effects
Nash equilibrium
25. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Sweezy oligopoly
Fair return price
Bargaining Power of Buyers
Concentration Ratio
26. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Network effects
Bargaining Power of Buyers
Ownership of a Key Input
Cutthroat Competition
27. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Inter-industry competition
Minimum efficient scale (full capacity)
Sequential-move game
Non-rivalrous consumption
28. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Horizontal Merger/Integration
First-Degree Price Discrimination (Perfect)
Limit price
29. In game theory - benefit obtained by party that moves first in a sequential game
Four-firm concentration ratio
One-shot game
Nonprime competition
First-mover advantage
30. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Imperfect competition
Profit
Price matching
Sequential-move game
31. 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
What is game?
Lerner index
Two-part Tariff Method of Pricing
Cross-subsidy pricing
32. 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"
Cheating
Examples of Oligopoly
Duopoly
Credible threat
33. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Unbalanced Oligopoly
Network effects
Disappearing invisible hand
Ownership of a Key Input
34. An oligopoly in which the firms produce a differentiated product
Present Value (PV)
Peak-load pricing
Differentiated oligopoly
Unbalanced Oligopoly
35. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Dominant strategy
First-Degree Price Discrimination (Perfect)
Third-degree price discrimination
Product differentiation
36. A situation in which neither firm has incentive to change its output given the other firm's output
Dominant firm oligopoly
Subgame perfect equilibrium
Cournot equilibrium
Competitive market
37. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Normal-form game
Present Value (PV)
Payoff table
Simultaneous decision games
38. 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
Payoff
Tit-for-tat strategy
Perfect Competition Barriers to Entry
39. 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
Double marginalization
Price war
Trigger strategy
Examples of Monopolistic Competition
40. 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
Network effects
Stackelberg oligopoly
Bargaining Power of Suppliers
Primary Sources of Monopolistic Power
41. 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
Two-part pricing
Inter-industry competition
Product Differentiation
Non-rivalrous consumption
42. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef
Homogenous oligopoly
Rothschild index
Non-rivalrous consumption
Unbalanced Oligopoly
43. 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
Concentration Ratio
Sweezy oligopoly
Non-price competition
44. A situation in which no one wants to change his or her behavior
Price war
Natural Monopoly (local phone or electric company)
Equilibrium
Dominant firm oligopoly
45. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Kinked-demand curve
Rent-seeking behavior
Concentration Ratio
Monopolistic Competition
46. The competition for sales between the products of one industry and the products of another industry
Inter-industry competition
Reservation Price
Undifferentiated
Trigger strategy
47. 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
Interdependence
Randomized pricing
Perfect Competitor Making a Profit
Non-cooperative equilibrium
48. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Follower
Subgame perfect equilibrium
Market
Basis for Product Differentiation
49. Simultaneous move game that is not repeated
Maximizing profit in Oligopoly games
One-shot game
Basis for Product Differentiation
Marginal Revenue
50. 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
Indefinitely repeated game
Payoff table
Ownership of a Key Input
Market Structure