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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. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Marginal Revenue
Mutual interdependence
First-Degree Price Discrimination (Perfect)
Sequential game
2. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Peak-load pricing
Implicit Collusion
Sequential-move game
Dominant firm oligopoly
3. 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
Bargaining Power of Suppliers
Implicit Collusion
Sweezy oligopoly
Oligopoly
4. Demand line is above ATC curve
First-Degree Price Discrimination (Perfect)
Strategic behavior
Perfect Competitor Making a Profit
Tacit collusion
5. Long-run marginal cost curve above long-run average cost
Perfect Competition Long Run Supply
Subgame perfect equilibrium
Empty threat
One-shot game
6. Game in which one player makes a move after observing the other player's move
Cheating
Cooperation
First-Degree Price Discrimination (Perfect)
Sequential-move game
7. 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)
Stackelberg oligopoly
Competitive market
Trigger strategy
Tit-for-tat strategy
8. An oligopoly in which the firms produce a standardized product
Dansby-Willig performance index
Homogenous oligopoly
Non-price competition
Vertical Merger
9. The practice of bundling several different products together and selling them at a single "bundle" price
The Threat from Potential Entrants Firms
Commodity bundling
Nonprime competition
Cutthroat Competition
10. 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
Simultaneous decision games
Disappearing invisible hand
Homogenous oligopoly
Joint Venture
11. The practice of charging different prices to consumers for the same good or service
Dominant firm oligopoly
Non-rivalrous consumption
Price discrimination
Examples of Oligopoly
12. 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
High Price Elasticity
Dominant firm oligopoly
Rothschild index
Cournot oligopoly
13. An oligopoly in which the firms produce a differentiated product
Differentiated oligopoly
Mixed (randomized) strategy
Inefficiency
Dominant strategy
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
Primary Sources of Monopolistic Power
Examples of Oligopoly
Cross-subsidy pricing
Dominant firm oligopoly
15. 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
Concentration Ratio
Secure strategy
Homogenous oligopoly
Block pricing
16. Revenue-Costs
Profit
Cournot oligopoly
Monopolistic Characteristics:
Merger
17. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Implicit Collusion
Payoff matrix
Cutthroat Competition
Socially optimal price
18. Simultaneous move game that is not repeated
Cooperation
Monopoly (characteristics)
Non-cooperative behavior
One-shot game
19. Steel - autos - colas - airlines
Equilibrium
Non-cooperative equilibrium
Examples of Oligopoly
Block pricing
20. A product's ability to satisfy a large number of consumers at the same time
Cutthroat Competition
Cournot oligopoly
Simultaneous consumption
Dominant strategy
21. Produce identical products
Pure monopoly
Common knowledge
Perfect Competitor Characteristics
Cournot oligopoly
22. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Ownership of a Key Input
Dominant strategy
Limit pricing
Empty threat
23. When an upstream divisions leverages "monopoly like" power to charge higher marginal cost to a downstream division - resulting in failure of the firm to optimize profits based on the wrong quantity decision at the firms level
Double marginalization
Dominant strategy
Perfect Competition (characteristics)
Economies of scale
24. 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
Follower
Competitive market
Undifferentiated
Equilibrium
25. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Reservation Price
Cooperation
Minimum efficient scale (full capacity)
Price Leadership
26. A strategy or action that always provides the best outcome no matter what decisions rivals make
Price discrimination
Primary Sources of Monopolistic Power
Economies of scale
Dominant strategy
27. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Rent-seeking behavior
Simultaneous-move game
Third-Degree Price Discrimination
Four-firm concentration ratio
28. The competition for sales between the products of one industry and the products of another industry
Empty threat
Nonprime competition
Inter-industry competition
Simultaneous decision games
29. A simpler way to operationalize first-degree price discrimination
Two-part Tariff Method of Pricing
Kinked-demand curve
Dominant strategy equilibrium
Concentration Ratio
30. In game theory - benefit obtained by party that moves first in a sequential game
First-mover advantage
Merger
Present Value (PV)
Disappearing invisible hand
31. Maximize economic profit by producing the quantity at which MC=MR
Subgame perfect equilibrium
Network effects
Maximizing profit in Oligopoly games
Rothschild index
32. The smallest quantity at which the average cost curve reaches its minimum
Two-part Tariff Method of Pricing
Rothschild index
Unbalanced Oligopoly
Minimum efficient scale (full capacity)
33. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Cross-subsidy pricing
Examples of Oligopoly
Monopoly (characteristics)
Cournot equilibrium
34. A situation in which neither firm has incentive to change its output given the other firm's output
Cournot equilibrium
Non-price competition
Simultaneous consumption
Price Leadership
35. 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
Import competition
Mutual Interdependence
Cournot oligopoly
Monopolistic Competition
36. Marginal cost curve above average variable cost - P* = SRMC
Commodity bundling
Cutthroat Competition
Perfect Competition Short Run Supply
Block pricing
37. Using advertising and other means to try to increase a firm's sales
Limit pricing
Dominant strategy
Non-price competition
Payoff matrix
38. Involves price-fixing
Empty threat
The Threat from Potential Entrants Firms
Covert Collusion
Competitive market
39. 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
Bargaining Power of Suppliers
Patent
Nonprime competition
Extensive-form game
40. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Kinked-demand curve
Unbalanced Oligopoly
Marginal Revenue
Product differentiation
41. Pricing strategy in which consumers are charged a fixed fee for the right to purchase a product - plus a per-unit charge for each unit purchased
Inter-industry competition
Two-part pricing
Mixed (randomized) strategy
Reservation Price
42. 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
Non-cooperative equilibrium
Secure strategy
Network effects
Unbalanced Oligopoly
43. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Four-firm concentration ratio
Price war
Kinked demand curve model
Homogenous oligopoly
44. The reward received by a player in a game - such as the profit earned by an oligopolist
Interdependence
Horizontal Merger/Integration
Product Differentiation
Payoff
45. Takes Place inside the Mind of the consumer
Product Differentiation
Third-degree price discrimination
Imperfect competition
Prisoner's dilemma
46. The derivative of total revenue
Competitive market
Socially optimal price
Marginal Revenue
Block pricing
47. Increases in the value of a product to each user - including existing users - as the total number of users rises
Fair return price
Network effects
Normal-form game
Contestable market
48. Produce differentiated products. Make a profit or take a lost in the short run - in the long run the firm will break even. (MOST number of firms.)
Double marginalization
Trigger strategy
Monopolistic Characteristics:
Secure strategy
49. The competition that domestic firms encounter from the products and services of foreign producers
Sequential game
Non-price competition
Import competition
Perfect Competition Short Run Supply
50. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Empty threat
Sequential-move game
Herfindahl-Hirschman index (HHI)
Product Differentiation