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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. Simultaneous move game that is not repeated
Kinked-demand curve
One-shot game
Non-cooperative equilibrium
Monopoly (characteristics)
2. 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
Non-price competition
First-mover advantage
Homogenous oligopoly
Socially optimal price
3. 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
Extensive-form game
Indefinitely repeated game
Leader
Limit pricing
4. Ignoring the effects of their actions on each others' profits
Primary Sources of Monopolistic Power
Pure monopoly
Non-cooperative behavior
Business strategy
5. A simpler way to operationalize first-degree price discrimination
Two-part Tariff Method of Pricing
Marginal Revenue
Prisoners' dilemma
Collusion
6. 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
Commodity bundling
Maximizing profit in Oligopoly games
Duopoly
Non-cooperative equilibrium
7. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Price Leadership
Second-Degree Price Discrimination
Rent-seeking behavior
Tit-for-tat strategy
8. Rival who sets its output after the leader (Stackelberg's model)
Follower
Conglomerate Merger
Disappearing invisible hand
Sequential-move game
9. An oligopoly in which the firms produce a differentiated product
Differentiated oligopoly
Joint Venture
Kinked demand curve model
What is game?
10. When each firm has an incentive to cheat - but both are worse off if both cheat -- illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so
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11. The situation when a firm's long-run average costs fall as it increases output
Normal-form game
Economies of scale
Business strategy
Cournot equilibrium
12. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Subgame perfect equilibrium
Price matching
Undifferentiated
13. Cooperation among firms that does not involve an explicit agreement
Sweezy oligopoly
Inefficiency
Tacit collusion
Import competition
14. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Minimum efficient scale (full capacity)
Merger
Bargaining Power of Buyers
Common knowledge
15. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Non-rivalrous consumption
Transfer pricing
Tacit collusion
Monopolistic Competition
16. 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)
Reservation Price
Extensive-form game
Barrier to entry
Horizontal Merger/Integration
17. A combination of two or more companies into one company
Brand Multiplication
Interdependence
Merger
Implicit Collusion
18. 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-move game
Implicit Collusion
Nash equilibrium
Tacit collusion
19. Each seller can sell all he wants to sell at the going price - Buyers and sellers are price takers - The goods offered by the different sellers are largely the same - The actions of any single buyer or seller will have a negligible impact on the m
Payoff
Competitive market
Joint Venture
Dominant firm oligopoly
20. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Mutual Interdependence
Peak-load pricing
Two-part pricing
The Threat from Potential Entrants Firms
21. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Product differentiation
Price matching
Patent
Interdependence
22. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Cross-subsidy pricing
Mixed (randomized) strategy
Duopoly
Tacit collusion
23. Using advertising and other means to try to increase a firm's sales
Cournot oligopoly
Conglomerate Merger
Non-price competition
Differentiated oligopoly
24. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Collusion
Dansby-Willig performance index
Subgame perfect equilibrium
Basis for Product Differentiation
25. Steel - autos - colas - airlines
Price matching
Imperfect competition
Socially optimal price
Examples of Oligopoly
26. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Dominant strategy
Fair return price
Two-part Tariff Method of Pricing
Payoff matrix
27. In game theory - a decision rule that describes the actions a player will take at each decision point
Perfect Competitor Characteristics
Sequential-move game
Simultaneous-move game
Strategy
28. Single firm is sole producer of a product for which there are no close substitutes
Pure monopoly
Primary Sources of Monopolistic Power
Horizontal Merger/Integration
Two-part pricing
29. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Monopolistic Characteristics:
Tit-for-tat strategy
Homogenous oligopoly
30. Revenue-Costs
Tacit collusion
Simultaneous-move game
Profit
First-Degree Price Discrimination (Perfect)
31. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Natural Monopoly (local phone or electric company)
Non-cooperative behavior
Price matching
Examples of Monopolistic Competition
32. A firm whose price decisions are tacitly accepted and followed by others in the industry
Price Leadership
Competitive market
Monopolistic Characteristics:
Price discrimination
33. Variations on one good so that a firm can increase market sharea
Socially optimal price
Dominant strategy
Normal-form game
Brand Multiplication
34. Game in which one player makes a move after observing the other player's move
Dominant firm oligopoly
Sequential-move game
Commodity bundling
Price war
35. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Monopoly (characteristics)
Marginal Revenue
Implicit Collusion
Inefficiency
36. 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
Bargaining Power of Suppliers
Equilibrium
Undifferentiated
Subgame perfect equilibrium
37. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Primary Sources of Monopolistic Power
Price Leadership
Differentiated oligopoly
Limit price
38. 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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39. 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
Two-part pricing
Simultaneous consumption
Common knowledge
40. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Strategy
Primary Sources of Monopolistic Power
Herfindahl-Hirschman index (HHI)
Profit
41. When a manager makes a noncooperative decision
Cheating
Basis for Product Differentiation
Duopoly
Transfer pricing
42. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Monopolistic Competition
Perfect Competitor Characteristics
Indefinitely repeated game
Normal-form game
43. 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)
Four-firm concentration ratio
Strategy
Duopoly
Bertrand oligopoly
44. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Cross-subsidy pricing
Bertrand oligopoly
No cooperative equilibrium
Open Collusion
45. An equilibrium in a game in which players cooperate to increase their mutual payoff
Cooperative equilibrium
Herfindahl-Hirschman index (HHI)
Market
Competitive market
46. A strategy or action that always provides the best outcome no matter what decisions rivals make
Dominant strategy
Merger
Rothschild index
Kinked demand curve model
47. 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
Limit pricing
Normal-form game
Strategic behavior
Stackelberg oligopoly
48. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Rent-seeking behavior
Undifferentiated
Limit pricing
Mixed (randomized) strategy
49. Long-run marginal cost curve above long-run average cost
Perfect Competition Long Run Supply
Non-rivalrous consumption
Bargaining Power of Buyers
Covert Collusion
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
Mutual interdependence
Pure monopoly
Payoff table
Contestable market