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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. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Nash equilibrium
Horizontal Merger/Integration
Business strategy
2. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Secure strategy
Credible threat
Strategy
Third-Degree Price Discrimination
3. When firms make decisions that make every firm better off than in a noncooperative Nash equilibrium
Cooperation
Natural Monopoly (local phone or electric company)
Tacit collusion
Examples of Oligopoly
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"
Strategic behavior
Stackelberg oligopoly
Profit
Credible threat
5. 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
Trigger strategy
Indefinitely repeated game
Concentration Ratio
Dominant firm oligopoly
6. The competition for sales between the products of one industry and the products of another industry
Second-Degree Price Discrimination
Mutual Interdependence
Patent
Inter-industry competition
7. 1/(1+i)n
Monopolistic Competition
Sweezy oligopoly
Marginal Revenue
Present Value (PV)
8. 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
Perfect Competitor Characteristics
Disappearing invisible hand
Imperfect competition
Limit pricing
9. A situation in which a change in price strategy by one firm affects sales and profits of another
Tit-for-tat strategy
Implicit Collusion
Limit pricing
Mutual interdependence
10. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Reservation Price
No cooperative equilibrium
Finding profit for oligopoly games
Perfect Competition (characteristics)
11. Using advertising and other means to try to increase a firm's sales
Market
Mutual Interdependence
Non-cooperative behavior
Non-price competition
12. Actions taken by a firm to achieve a goal - such as maximizing profits
Interdependence
Third-Degree Price Discrimination
The Threat from Potential Entrants Firms
Business strategy
13. The derivative of total revenue
Covert Collusion
Product differentiation
Repeated game
Marginal Revenue
14. The practice of bundling several different products together and selling them at a single "bundle" price
Joint Venture
Monopoly (characteristics)
Commodity bundling
Differentiated oligopoly
15. 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
Limit pricing
Present Value (PV)
Cross-subsidy pricing
Socially optimal price
16. A firm whose price decisions are tacitly accepted and followed by others in the industry
Perfect Competitor Making a Profit
Transfer pricing
Profit
Price Leadership
17. 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
Competitive market
Strategy
Marginal Revenue
Barrier to entry
18. Involves price-fixing
Covert Collusion
Present Value (PV)
Payoff
Subgame perfect equilibrium
19. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Concentration Ratio
Homogenous oligopoly
Two-part Tariff Method of Pricing
Dominant strategy
20. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Collusion
Third-degree price discrimination
Simultaneous decision games
Cooperation
21. Price Sensitive
Cournot equilibrium
Third-degree price discrimination
Credible threat
High Price Elasticity
22. Revenue-Costs
Reservation Price
First-Degree Price Discrimination (Perfect)
Profit
Homogenous oligopoly
23. 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
Joint Venture
Undifferentiated
Network effects
Non-rivalrous consumption
24. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Dansby-Willig performance index
Fair return price
Two-part pricing
Collusion
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
Covert Collusion
Cournot oligopoly
Tacit collusion
Business strategy
26. 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
Horizontal Merger/Integration
Cutthroat Competition
Dominant firm oligopoly
27. 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
Simultaneous decision games
Extensive-form game
Tacit collusion
Limit pricing
28. Single firm is sole producer of a product for which there are no close substitutes
First-mover advantage
Economies of scale
Pure monopoly
Simultaneous-move game
29. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Business strategy
Dominant firm oligopoly
Primary Sources of Monopolistic Power
Bargaining Power of Suppliers
30. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Perfect Competition Long Run Supply
Price discrimination
Commodity bundling
31. 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
Perfect Competition Long Run Supply
Payoff matrix
Contestable market
Rent-seeking behavior
32. First firm to set its output (Stackelberg's model)
Unbalanced Oligopoly
Leader
Simultaneous consumption
Contestable market
33. 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
Network effects
Bertrand oligopoly
Third-Degree Price Discrimination
Inter-industry competition
34. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Conglomerate Merger
Mixed (randomized) strategy
Perfect Competition Short Run Supply
Barrier to entry
35. The smallest quantity at which the average cost curve reaches its minimum
Minimum efficient scale (full capacity)
Finding profit for oligopoly games
Four-firm concentration ratio
Concentration Ratio
36. All firms and individuals willing and able to buy or sell a particular product
Monopolistic Characteristics:
Fair return price
Market
Profit
37. Produce identical products
Basis for Product Differentiation
Perfect Competition Short Run Supply
Simultaneous consumption
Perfect Competitor Characteristics
38. A situation in which neither firm has incentive to change its output given the other firm's output
Mutual interdependence
Strategy
Sequential-move game
Cournot equilibrium
39. In game theory - a game that is played again sometime after the previous game ends
Mixed (randomized) strategy
Repeated game
First-mover advantage
Bargaining Power of Buyers
40. 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
Finding profit for oligopoly games
Cheating
Tacit collusion
Perfect Competitor Characteristics
41. The practice of charging different prices to consumers for the same good or service
Price discrimination
Homogenous oligopoly
Ownership of a Key Input
Strategy
42. A simpler way to operationalize first-degree price discrimination
Monopolistic Characteristics:
Perfect Competitor Characteristics
Profit
Two-part Tariff Method of Pricing
43. Variations on one good so that a firm can increase market sharea
The Threat from Potential Entrants Firms
Brand Multiplication
Non-cooperative behavior
Kinked-demand curve
44. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Commodity bundling
Mutual Interdependence
Payoff matrix
Stackelberg oligopoly
45. 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)
Natural Monopoly (local phone or electric company)
Maximizing profit in Oligopoly games
Barrier to entry
Cheating
46. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
No cooperative equilibrium
Perfect Competition (characteristics)
Simultaneous-move game
47. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Cooperation
Conglomerate Merger
Network effects
Rothschild index
48. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Covert Collusion
Horizontal Merger/Integration
Bargaining Power of Suppliers
Monopolistic Characteristics:
49. Ignoring the effects of their actions on each others' profits
Rothschild index
Non-cooperative behavior
Economies of scale
Sequential game
50. A product's ability to satisfy a large number of consumers at the same time
Open Collusion
Randomized pricing
Strategy
Simultaneous consumption