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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. Price Sensitive
Monopoly (characteristics)
Prisoners' dilemma
Market
High Price Elasticity
2. 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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3. 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)
Credible threat
Stackelberg oligopoly
Differentiated oligopoly
Payoff matrix
4. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Non-rivalrous consumption
Covert Collusion
Conglomerate Merger
High Price Elasticity
5. An oligopoly in which the firms produce a standardized product
Homogenous oligopoly
Business strategy
Simultaneous decision games
Perfect Competition (characteristics)
6. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Joint Venture
Inefficiency
Undifferentiated
First-Degree Price Discrimination (Perfect)
7. Rival who sets its output after the leader (Stackelberg's model)
Monopolistic Competition
Profit
Follower
Perfect Competition Barriers to Entry
8. A situation in which no one wants to change his or her behavior
Non-price competition
Equilibrium
Vertical Merger
Dansby-Willig performance index
9. 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
Non-cooperative equilibrium
Prisoners' dilemma
Joint Venture
Differentiated oligopoly
10. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Fair return price
Third-degree price discrimination
Payoff matrix
Economies of scale
11. Simultaneous move game that is not repeated
Tacit collusion
Inefficiency
Credible threat
One-shot game
12. 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
Nonprime competition
Perfect Competition Short Run Supply
Undifferentiated
Bertrand oligopoly
13. The players end up worse off than they would if they were able to cooperate; -the pursuit of self-interest does not promote the social interest in these games
Third-Degree Price Discrimination
Non-cooperative behavior
Payoff matrix
Disappearing invisible hand
14. Using advertising and other means to try to increase a firm's sales
Non-price competition
Primary Sources of Monopolistic Power
Bargaining Power of Suppliers
Interdependence
15. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Lerner index
Payoff
Market
Bargaining Power of Buyers
16. Actions taken by firms to plan for and react to competition from rival firms
Strategic behavior
Bargaining Power of Buyers
What is game?
Transfer pricing
17. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Repeated game
Vertical Merger
Competitive market
Oligopoly
18. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Cournot equilibrium
Cournot oligopoly
One-shot game
Horizontal Merger/Integration
19. 1/(1+i)n
Non-cooperative equilibrium
Present Value (PV)
Fair return price
Sequential game
20. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Fair return price
Kinked-demand curve
Indefinitely repeated game
Basis for Product Differentiation
21. All firms and individuals willing and able to buy or sell a particular product
Cooperative equilibrium
Peak-load pricing
Rent-seeking behavior
Market
22. The exclusive right to a product for a period of 20 years from the date the product is invented
Dominant firm oligopoly
Price discrimination
Patent
Cournot equilibrium
23. Maximize economic profit by producing the quantity at which MC=MR
Bertrand oligopoly
Maximizing profit in Oligopoly games
Tacit collusion
Normal-form game
24. A strategy or action that always provides the best outcome no matter what decisions rivals make
One-shot game
Repeated game
Indefinitely repeated game
Dominant strategy
25. The practice of bundling several different products together and selling them at a single "bundle" price
One-shot game
Commodity bundling
Contestable market
Merger
26. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Mixed (randomized) strategy
Unbalanced Oligopoly
Normal-form game
Price discrimination
27. A combination of two or more companies into one company
Extensive-form game
Merger
Credible threat
Monopolistic Competition
28. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
The Threat from Potential Entrants Firms
Reservation Price
Perfect Competition Barriers to Entry
Maximizing profit in Oligopoly games
29. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Kinked demand curve model
Bertrand oligopoly
Contestable market
Price matching
30. 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
Monopoly (characteristics)
Maximizing profit in Oligopoly games
Perfect Competitor Characteristics
Contestable market
31. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Randomized pricing
Limit pricing
Block pricing
Market
32. 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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33. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Empty threat
Bertrand oligopoly
No cooperative equilibrium
Four-firm concentration ratio
34. 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
Competitive market
Non-cooperative equilibrium
Four-firm concentration ratio
Indefinitely repeated game
35. A simpler way to operationalize first-degree price discrimination
Randomized pricing
Two-part Tariff Method of Pricing
Monopoly (characteristics)
Undifferentiated
36. A strategy that guarantees the highest payoff given the worst possible scenario
Examples of Monopolistic Competition
Indefinitely repeated game
Secure strategy
Price Leadership
37. 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
Monopolistic Competition
Lerner index
Mutual interdependence
Finding profit for oligopoly games
38. 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
Brand Multiplication
Mutual interdependence
Repeated game
Monopolistic Competition
39. First firm to set its output (Stackelberg's model)
Collusion
Two-part Tariff Method of Pricing
Covert Collusion
Leader
40. 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
Cournot equilibrium
Natural Monopoly (local phone or electric company)
Mutual interdependence
Nash equilibrium
41. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Sequential game
Contestable market
Cournot equilibrium
Rothschild index
42. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Common knowledge
Nonprime competition
Perfect Competition Long Run Supply
Disappearing invisible hand
43. 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
Joint Venture
Product differentiation
Horizontal Merger/Integration
Subgame perfect equilibrium
44. When a manager makes a noncooperative decision
Cheating
Block pricing
Indefinitely repeated game
Rent-seeking behavior
45. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Mixed (randomized) strategy
Rent-seeking behavior
Maximizing profit in Oligopoly games
Strategy
46. 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
Profit
Two-part pricing
Payoff table
Oligopoly
47. In game theory - a decision rule that describes the actions a player will take at each decision point
Price Leadership
Two-part pricing
Strategy
Inter-industry competition
48. The competition that domestic firms encounter from the products and services of foreign producers
Perfect Competitor Making a Profit
Price Leadership
Import competition
Monopolistic Competition
49. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Perfect Competition (characteristics)
Joint Venture
Four-firm concentration ratio
Rothschild index
50. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Repeated game
Prisoners' dilemma
Peak-load pricing
No cooperative equilibrium