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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. Rules - strategies - payoffs - outcomes
Bertrand oligopoly
What is game?
Payoff table
One-shot game
2. A situation in which all decision makers know the payoff table - and they believe all other decision makers also know the payoff table
Limit price
Bargaining Power of Suppliers
Common knowledge
Strategy
3. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Strategy
Business strategy
Barrier to entry
Rent-seeking behavior
4. The smallest quantity at which the average cost curve reaches its minimum
Inefficiency
Third-degree price discrimination
Minimum efficient scale (full capacity)
Horizontal Merger/Integration
5. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
First-Degree Price Discrimination (Perfect)
Limit pricing
Normal-form game
Non-cooperative behavior
6. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Bertrand oligopoly
Perfect Competition Short Run Supply
Perfect Competition (characteristics)
Bargaining Power of Buyers
7. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Market
Kinked-demand curve
Bargaining Power of Buyers
Monopoly (characteristics)
8. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Limit pricing
Bargaining Power of Buyers
Extensive-form game
First-Degree Price Discrimination (Perfect)
9. A situation in which no one wants to change his or her behavior
Cournot equilibrium
Perfect Competitor Making a Profit
Equilibrium
Pure monopoly
10. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Product differentiation
Strategy
Business strategy
Collusion
11. The physical characteristics of the market within which firms interact
Payoff matrix
Subgame perfect equilibrium
Market Structure
Cheating
12. 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
Subgame perfect equilibrium
What is game?
Primary Sources of Monopolistic Power
Tacit collusion
13. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Patent
Barrier to entry
Horizontal Merger/Integration
Simultaneous-move game
14. Cooperation among firms that does not involve an explicit agreement
Rent-seeking behavior
Tacit collusion
Third-Degree Price Discrimination
Socially optimal price
15. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Transfer pricing
Open Collusion
Competitive market
Kinked-demand curve
16. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Perfect Competition (characteristics)
Third-degree price discrimination
Profit
Differentiated oligopoly
17. Increases in the value of a product to each user - including existing users - as the total number of users rises
Strategic behavior
Network effects
Brand Multiplication
Four-firm concentration ratio
18. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Mixed (randomized) strategy
Price matching
Payoff table
Strategy
19. A situation in which neither firm has incentive to change its output given the other firm's output
Cournot equilibrium
Undifferentiated
Barrier to entry
Third-Degree Price Discrimination
20. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Market
Cross-subsidy pricing
Disappearing invisible hand
Undifferentiated
21. Using advertising and other means to try to increase a firm's sales
Strategic behavior
Price Leadership
Non-price competition
Mutual interdependence
22. If production of a good requires a particular input - then control of that input can be a barrier to entry
Product Differentiation
Trigger strategy
Randomized pricing
Ownership of a Key Input
23. 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
Cutthroat Competition
Nash equilibrium
Mutual interdependence
Secure strategy
24. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Sequential game
Limit pricing
Simultaneous-move game
Concentration Ratio
25. 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
Peak-load pricing
Concentration Ratio
Trigger strategy
Limit pricing
26. 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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27. A product's ability to satisfy a large number of consumers at the same time
Simultaneous consumption
Four-firm concentration ratio
Basis for Product Differentiation
Maximizing profit in Oligopoly games
28. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Simultaneous consumption
Two-part pricing
Payoff matrix
Mixed (randomized) strategy
29. A measure of the difference between price and marginal cost as a fraction of the product's price. L=(P-MC)/P - refactoring gives: P=MC(1/(1-L)) - which gives us the "1/(1-L)" markup factor
Price war
Lerner index
Unbalanced Oligopoly
Perfect Competitor Characteristics
30. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Implicit Collusion
Payoff matrix
Present Value (PV)
Nonprime competition
31. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Payoff matrix
Perfect Competition (characteristics)
What is game?
Second-Degree Price Discrimination
32. In game theory - a game that is played again sometime after the previous game ends
Primary Sources of Monopolistic Power
Repeated game
Barrier to entry
Common knowledge
33. 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
Implicit Collusion
Payoff matrix
Socially optimal price
Concentration Ratio
34. All firms and individuals willing and able to buy or sell a particular product
Tit-for-tat strategy
Bargaining Power of Suppliers
Market
No cooperative equilibrium
35. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
One-shot game
Peak-load pricing
Marginal Revenue
Third-degree price discrimination
36. When a manager makes a noncooperative decision
Limit price
What is game?
Cheating
Duopoly
37. Physical differences - Convenience - Ambience - Reputations - Appeals to vanity - Unconscious fears and desires - Snob appeal - Customized products
Basis for Product Differentiation
Simultaneous-move game
Implicit Collusion
Nash equilibrium
38. The reward received by a player in a game - such as the profit earned by an oligopolist
Tacit collusion
Payoff
Differentiated oligopoly
No cooperative equilibrium
39. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Market
Business strategy
Tacit collusion
Conglomerate Merger
40. Face competition from companies that currently are not in the market but might enter
Non-cooperative behavior
Two-part Tariff Method of Pricing
The Threat from Potential Entrants Firms
Pure monopoly
41. 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)
Barrier to entry
Prisoners' dilemma
Second-Degree Price Discrimination
Marginal Revenue
42. 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
Cross-subsidy pricing
Undifferentiated
Repeated game
Contestable market
43. An industry where (1) there are few firms serving many customers; (2) firms produce differentiated products; (3) each firm believes rivals will respond to price reductions but will not follow price increases; and (4) barriers to entry exist
Sweezy oligopoly
Competitive market
Perfect Competition (characteristics)
Merger
44. The competition for sales between the products of one industry and the products of another industry
One-shot game
Contestable market
Inter-industry competition
Perfect Competition (characteristics)
45. Identical or substitutable
Undifferentiated
Non-rivalrous consumption
Empty threat
Randomized pricing
46. Takes Place inside the Mind of the consumer
Product Differentiation
Strategic behavior
Market
Economies of scale
47. Both players have dominant strategies and play them
Dominant strategy equilibrium
Sweezy oligopoly
Inter-industry competition
Cooperative equilibrium
48. A strategy or action that always provides the best outcome no matter what decisions rivals make
Lerner index
Dominant strategy
Present Value (PV)
No cooperative equilibrium
49. 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
Barrier to entry
Joint Venture
Contestable market
Four-firm concentration ratio
50. 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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