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Test your basic knowledge |
Business Competition
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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. 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
Rent-seeking behavior
Nash equilibrium
Present Value (PV)
2. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Kinked demand curve model
Limit pricing
Joint Venture
Unbalanced Oligopoly
3. 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
Payoff matrix
Kinked-demand curve
Lerner index
Subgame perfect equilibrium
4. 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
Second-Degree Price Discrimination
Simultaneous decision games
Duopoly
5. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
No cooperative equilibrium
Mutual Interdependence
Non-cooperative behavior
Brand Multiplication
6. Long-run marginal cost curve above long-run average cost
Third-degree price discrimination
Perfect Competition Long Run Supply
Cross-subsidy pricing
Contestable market
7. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Equilibrium
Prisoners' dilemma
Oligopoly
First-Degree Price Discrimination (Perfect)
8. A situation in which a change in price strategy by one firm affects sales and profits of another
Inefficiency
Simultaneous decision games
Monopolistic Competition
Mutual interdependence
9. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Joint Venture
Perfect Competitor Making a Profit
Monopolistic Characteristics:
Indefinitely repeated game
10. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Reservation Price
Monopolistic Competition
Examples of Monopolistic Competition
11. Identical or substitutable
Import competition
Undifferentiated
Limit pricing
Four-firm concentration ratio
12. Demand line is above ATC curve
Market Structure
Bargaining Power of Buyers
Perfect Competition Short Run Supply
Perfect Competitor Making a Profit
13. A trigger strategy that punishes after an episode of cheating and returns to cooperation if cheating ends
Payoff
Commodity bundling
Tit-for-tat strategy
Dominant strategy
14. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Non-cooperative behavior
Price matching
Subgame perfect equilibrium
Pure monopoly
15. When the decisions of two or more firms significantly affect each others' profits
Mutual interdependence
Limit price
Peak-load pricing
Interdependence
16. 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)
Limit pricing
Barrier to entry
Four-firm concentration ratio
Peak-load pricing
17. Involves price-fixing
Open Collusion
Covert Collusion
Dominant strategy equilibrium
Perfect Competitor Characteristics
18. 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
Peak-load pricing
Extensive-form game
Sweezy oligopoly
Indefinitely repeated game
19. 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
Inefficiency
Peak-load pricing
Bargaining Power of Suppliers
Limit pricing
20. Steel - autos - colas - airlines
Leader
Perfect Competition Barriers to Entry
Examples of Oligopoly
Tacit collusion
21. 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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22. 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"
Marginal Revenue
Stackelberg oligopoly
Credible threat
Unbalanced Oligopoly
23. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Interdependence
What is game?
Kinked-demand curve
Sequential game
24. 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
Strategic behavior
Bertrand oligopoly
One-shot game
Monopolistic Competition
25. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Indefinitely repeated game
Business strategy
Unbalanced Oligopoly
Normal-form game
26. Toothpaste - shampoo - restaurants - banks
Sequential-move game
Merger
Cooperation
Examples of Monopolistic Competition
27. 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
Inefficiency
Dominant firm oligopoly
Kinked-demand curve
Natural Monopoly (local phone or electric company)
28. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Barrier to entry
Implicit Collusion
Sequential game
Duopoly
29. 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
Two-part Tariff Method of Pricing
Dominant strategy equilibrium
Economies of scale
Subgame perfect equilibrium
30. Marginal cost curve above average variable cost - P* = SRMC
Price Leadership
Perfect Competition Short Run Supply
Cutthroat Competition
Cooperation
31. 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
Mutual Interdependence
Payoff table
Price matching
Bargaining Power of Suppliers
32. In game theory - a game that is played again sometime after the previous game ends
Vertical Merger
Maximizing profit in Oligopoly games
Dominant firm oligopoly
Repeated game
33. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Limit price
Mixed (randomized) strategy
Empty threat
Perfect Competitor Making a Profit
34. Face competition from companies that currently are not in the market but might enter
Block pricing
The Threat from Potential Entrants Firms
Examples of Monopolistic Competition
Concentration Ratio
35. 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
Pure monopoly
Price discrimination
Perfect Competition (characteristics)
Payoff table
36. 1/(1+i)n
Tit-for-tat strategy
Present Value (PV)
Cournot equilibrium
Finding profit for oligopoly games
37. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Price discrimination
Limit pricing
Fair return price
Mixed (randomized) strategy
38. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Collusion
Dominant strategy
Simultaneous consumption
Repeated game
39. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Randomized pricing
Dansby-Willig performance index
Perfect Competition Short Run Supply
Non-cooperative equilibrium
40. Rules - strategies - payoffs - outcomes
Herfindahl-Hirschman index (HHI)
What is game?
Simultaneous consumption
Extensive-form game
41. Keeps the price just where it is to maximize profit
Brand Multiplication
Extensive-form game
Dominant firm oligopoly
Cutthroat Competition
42. Takes Place inside the Mind of the consumer
One-shot game
Product Differentiation
Collusion
Non-cooperative behavior
43. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Examples of Oligopoly
Market
Basis for Product Differentiation
Commodity bundling
44. Both players have dominant strategies and play them
Market Structure
Payoff
Dominant strategy equilibrium
Strategy
45. If production of a good requires a particular input - then control of that input can be a barrier to entry
Cournot equilibrium
Ownership of a Key Input
Perfect Competition (characteristics)
Limit pricing
46. 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
Block pricing
Disappearing invisible hand
Payoff matrix
Network effects
47. All firms and individuals willing and able to buy or sell a particular product
Herfindahl-Hirschman index (HHI)
Perfect Competitor Characteristics
Strategic behavior
Market
48. The situation when a firm's long-run average costs fall as it increases output
Transfer pricing
Cournot oligopoly
Economies of scale
Simultaneous decision games
49. Actions taken by firms to plan for and react to competition from rival firms
Market
Oligopoly
Leader
Strategic behavior
50. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Limit pricing
Open Collusion
Natural Monopoly (local phone or electric company)
Conglomerate Merger