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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. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Dominant firm oligopoly
Tit-for-tat strategy
Concentration Ratio
Strategy
2. Steel - autos - colas - airlines
Open Collusion
Tacit collusion
Examples of Oligopoly
Cournot oligopoly
3. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Non-cooperative behavior
Patent
Payoff table
Payoff matrix
4. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Bargaining Power of Buyers
Brand Multiplication
Simultaneous decision games
Open Collusion
5. 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
Disappearing invisible hand
Duopoly
Double marginalization
Payoff table
6. The competition for sales between the products of one industry and the products of another industry
Bargaining Power of Suppliers
Perfect Competition Long Run Supply
Inter-industry competition
Sequential game
7. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Second-Degree Price Discrimination
Cheating
Price war
Bargaining Power of Suppliers
8. First firm to set its output (Stackelberg's model)
Perfect Competition (characteristics)
Leader
Cross-subsidy pricing
Lerner index
9. Price Sensitive
Implicit Collusion
High Price Elasticity
Dansby-Willig performance index
Bargaining Power of Buyers
10. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Rent-seeking behavior
Non-price competition
Perfect Competition (characteristics)
Empty threat
11. An oligopoly in which the firms produce a differentiated product
Differentiated oligopoly
Two-part Tariff Method of Pricing
Dominant strategy
Minimum efficient scale (full capacity)
12. A simpler way to operationalize first-degree price discrimination
Monopolistic Characteristics:
Repeated game
Two-part Tariff Method of Pricing
Price Leadership
13. Marginal cost curve above average variable cost - P* = SRMC
Horizontal Merger/Integration
Perfect Competition Short Run Supply
Repeated game
Simultaneous consumption
14. 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
Limit pricing
Herfindahl-Hirschman index (HHI)
Extensive-form game
15. 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
Dominant firm oligopoly
Perfect Competition Barriers to Entry
Cournot oligopoly
Concentration Ratio
16. Both players have dominant strategies and play them
Market Structure
The Threat from Potential Entrants Firms
Dominant strategy equilibrium
Randomized pricing
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.)
Prisoners' dilemma
Payoff table
Monopolistic Characteristics:
Import competition
18. 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
First-Degree Price Discrimination (Perfect)
Unbalanced Oligopoly
Finding profit for oligopoly games
Block pricing
19. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Extensive-form game
Commodity bundling
Unbalanced Oligopoly
20. Specific assets - Economies of scale - Excess capacity - Reputation effects
Import competition
Perfect Competition Barriers to Entry
Economies of scale
Block pricing
21. Toothpaste - shampoo - restaurants - banks
Examples of Monopolistic Competition
Nonprime competition
Inter-industry competition
Trigger strategy
22. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
No cooperative equilibrium
Nonprime competition
Mixed (randomized) strategy
Bargaining Power of Buyers
23. 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
Brand Multiplication
Two-part pricing
Open Collusion
Simultaneous-move game
24. A strategy that guarantees the highest payoff given the worst possible scenario
Imperfect competition
High Price Elasticity
Rothschild index
Secure strategy
25. 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
High Price Elasticity
Kinked-demand curve
Herfindahl-Hirschman index (HHI)
Basis for Product Differentiation
26. Cooperation among firms that does not involve an explicit agreement
Trigger strategy
Duopoly
Tacit collusion
Mutual interdependence
27. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Cooperative equilibrium
Monopolistic Characteristics:
Two-part Tariff Method of Pricing
Product differentiation
28. If production of a good requires a particular input - then control of that input can be a barrier to entry
Dansby-Willig performance index
Stackelberg oligopoly
Nash equilibrium
Ownership of a Key Input
29. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Payoff
Randomized pricing
Market Structure
Differentiated oligopoly
30. 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
Double marginalization
Second-Degree Price Discrimination
First-Degree Price Discrimination (Perfect)
Mutual Interdependence
31. Face competition from companies that currently are not in the market but might enter
Patent
The Threat from Potential Entrants Firms
Four-firm concentration ratio
Business strategy
32. When managers are able to charge each consumer their reservation price. Examples are car and home sales
First-Degree Price Discrimination (Perfect)
Sweezy oligopoly
Payoff matrix
Nonprime competition
33. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Double marginalization
The Threat from Potential Entrants Firms
Concentration Ratio
Market
34. 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
Limit pricing
Price discrimination
Monopolistic Competition
Price war
35. Demand line is above ATC curve
Subgame perfect equilibrium
Perfect Competitor Making a Profit
Four-firm concentration ratio
Equilibrium
36. 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
Oligopoly
Business strategy
Nash equilibrium
Cournot oligopoly
37. Takes Place inside the Mind of the consumer
Prisoner's dilemma
Examples of Monopolistic Competition
Product Differentiation
Randomized pricing
38. Keeps the price just where it is to maximize profit
Cutthroat Competition
One-shot game
Simultaneous consumption
Monopolistic Characteristics:
39. When a manager makes a noncooperative decision
Cheating
Transfer pricing
Duopoly
Fair return price
40. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Implicit Collusion
Repeated game
Bertrand oligopoly
Extensive-form game
41. 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
No cooperative equilibrium
Reservation Price
Price matching
42. 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
Prisoner's dilemma
Third-degree price discrimination
Bargaining Power of Suppliers
High Price Elasticity
43. Involves price-fixing
Covert Collusion
Inefficiency
Inter-industry competition
Price matching
44. Actions taken by firms to plan for and react to competition from rival firms
Non-rivalrous consumption
Prisoner's dilemma
Strategic behavior
Limit price
45. 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
Payoff table
Nash equilibrium
Empty threat
Marginal Revenue
46. 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
Herfindahl-Hirschman index (HHI)
Strategic behavior
Leader
47. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Sequential-move game
Collusion
Payoff matrix
Kinked demand curve model
48. 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)
Marginal Revenue
Four-firm concentration ratio
Maximizing profit in Oligopoly games
Inter-industry competition
49. A situation in which a change in price strategy by one firm affects sales and profits of another
Fair return price
Third-degree price discrimination
Stackelberg oligopoly
Mutual interdependence
50. Game in which each player makes decisions without knowledge of the other player's decisions
Simultaneous-move game
Repeated game
Finding profit for oligopoly games
Competitive market