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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. Toothpaste - shampoo - restaurants - banks
Commodity bundling
First-Degree Price Discrimination (Perfect)
Examples of Monopolistic Competition
Maximizing profit in Oligopoly games
2. In game theory - benefit obtained by party that moves first in a sequential game
Kinked-demand curve
The Threat from Potential Entrants Firms
First-mover advantage
Covert Collusion
3. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Differentiated oligopoly
Price discrimination
Follower
Third-degree price discrimination
4. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Tit-for-tat strategy
Stackelberg oligopoly
Product differentiation
Vertical Merger
5. Takes Place inside the Mind of the consumer
Cross-subsidy pricing
Two-part pricing
Empty threat
Product Differentiation
6. Each firm believes that if it raises its price - its competitors will not follow - but if it lowers its price all of its competitors will follow; -a model in which firms in an oligopoly match price cuts by other firms - but do not match price hike
Cheating
Kinked demand curve model
Kinked-demand curve
Common knowledge
7. 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
Undifferentiated
First-Degree Price Discrimination (Perfect)
Product Differentiation
Monopolistic Competition
8. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Sequential-move game
Dansby-Willig performance index
Primary Sources of Monopolistic Power
Product Differentiation
9. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Common knowledge
Product differentiation
Merger
Inefficiency
10. 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
Profit
Finding profit for oligopoly games
Contestable market
11. 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
Monopolistic Characteristics:
Homogenous oligopoly
Payoff table
Extensive-form game
12. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Fair return price
Rent-seeking behavior
Joint Venture
13. A measure of the sensitivity to price of a product group as a whole relative to the sensitivity of the quantity demanded of a single firm to a change in its price. R=Et/Ef
Duopoly
Finding profit for oligopoly games
Rothschild index
Cutthroat Competition
14. 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
Product differentiation
Dominant strategy
Dominant firm oligopoly
Minimum efficient scale (full capacity)
15. Revenue-Costs
Brand Multiplication
Ownership of a Key Input
Bargaining Power of Suppliers
Profit
16. Using advertising and other means to try to increase a firm's sales
Normal-form game
Dominant strategy
Non-price competition
Payoff
17. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Bertrand oligopoly
Randomized pricing
Ownership of a Key Input
Secure strategy
18. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Market
Unbalanced Oligopoly
Subgame perfect equilibrium
Mixed (randomized) strategy
19. Variations on one good so that a firm can increase market sharea
Leader
Brand Multiplication
Bertrand oligopoly
Rent-seeking behavior
20. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Horizontal Merger/Integration
Perfect Competitor Making a Profit
Second-Degree Price Discrimination
Payoff matrix
21. Price Sensitive
High Price Elasticity
Simultaneous decision games
Interdependence
Minimum efficient scale (full capacity)
22. Identical or substitutable
Maximizing profit in Oligopoly games
Minimum efficient scale (full capacity)
Undifferentiated
Barrier to entry
23. Pricing strategy in which identical products are packaged together in order to enhance profits by forcing customers to make an all-or-none decision to purchase
Indefinitely repeated game
Commodity bundling
Block pricing
Oligopoly
24. The situation when a firm's long-run average costs fall as it increases output
One-shot game
Vertical Merger
Merger
Economies of scale
25. 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
Stackelberg oligopoly
Non-price competition
Trigger strategy
Basis for Product Differentiation
26. First firm to set its output (Stackelberg's model)
Non-cooperative behavior
Kinked-demand curve
Leader
Perfect Competitor Characteristics
27. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Network effects
Rent-seeking behavior
No cooperative equilibrium
Product Differentiation
28. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Network effects
Duopoly
Oligopoly
29. Rules - strategies - payoffs - outcomes
Dansby-Willig performance index
Limit price
Implicit Collusion
What is game?
30. A strategy that guarantees the highest payoff given the worst possible scenario
Secure strategy
Bargaining Power of Buyers
Monopoly (characteristics)
Limit price
31. Actions taken by a firm to achieve a goal - such as maximizing profits
The Threat from Potential Entrants Firms
Inter-industry competition
Profit
Business strategy
32. The reward received by a player in a game - such as the profit earned by an oligopolist
Network effects
Payoff
Payoff matrix
Payoff table
33. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Empty threat
Basis for Product Differentiation
Collusion
First-mover advantage
34. A firm whose price decisions are tacitly accepted and followed by others in the industry
Minimum efficient scale (full capacity)
Nash equilibrium
Price Leadership
Rothschild index
35. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Cross-subsidy pricing
Tacit collusion
Unbalanced Oligopoly
One-shot game
36. Involves price-fixing
Bargaining Power of Suppliers
Brand Multiplication
Covert Collusion
The Threat from Potential Entrants Firms
37. 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)
Price matching
Rothschild index
Equilibrium
Barrier to entry
38. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
First-mover advantage
Disappearing invisible hand
Non-cooperative behavior
Conglomerate Merger
39. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Disappearing invisible hand
Prisoners' dilemma
Two-part pricing
Payoff matrix
40. All firms and individuals willing and able to buy or sell a particular product
Dominant strategy
Import competition
Dominant firm oligopoly
Market
41. 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
Secure strategy
Strategy
Monopoly (characteristics)
42. 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
Fair return price
Second-Degree Price Discrimination
Cournot oligopoly
Ownership of a Key Input
43. In game theory - a decision rule that describes the actions a player will take at each decision point
Prisoners' dilemma
Stackelberg oligopoly
Joint Venture
Strategy
44. 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
Disappearing invisible hand
Contestable market
Simultaneous consumption
Finding profit for oligopoly games
45. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Kinked demand curve model
Empty threat
Tacit collusion
Socially optimal price
46. Maximize economic profit by producing the quantity at which MC=MR
Common knowledge
Pure monopoly
Open Collusion
Maximizing profit in Oligopoly games
47. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Extensive-form game
Natural Monopoly (local phone or electric company)
Fair return price
Cooperative equilibrium
48. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Common knowledge
Rent-seeking behavior
Limit pricing
Brand Multiplication
49. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Basis for Product Differentiation
Sequential game
Indefinitely repeated game
Undifferentiated
50. A situation in which no one wants to change his or her behavior
Duopoly
Socially optimal price
Equilibrium
Fair return price