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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. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Monopoly (characteristics)
Vertical Merger
Simultaneous decision games
2. 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
Dominant firm oligopoly
Mutual Interdependence
Mixed (randomized) strategy
Disappearing invisible hand
3. Marginal cost curve above average variable cost - P* = SRMC
Bargaining Power of Buyers
Business strategy
Repeated game
Perfect Competition Short Run Supply
4. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Vertical Merger
Trigger strategy
Prisoner's dilemma
Homogenous oligopoly
5. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Stackelberg oligopoly
Market
Peak-load pricing
Minimum efficient scale (full capacity)
6. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Limit price
Examples of Oligopoly
Rent-seeking behavior
Prisoners' dilemma
7. Occurs when a firm produces output - whatever its level - at a higher cost than is necessary to produce it
Primary Sources of Monopolistic Power
One-shot game
Double marginalization
Inefficiency
8. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Market Structure
Price matching
Product Differentiation
Third-Degree Price Discrimination
9. Revenue-Costs
Profit
Payoff
Finding profit for oligopoly games
Homogenous oligopoly
10. 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
Limit pricing
Primary Sources of Monopolistic Power
Cournot oligopoly
Undifferentiated
11. 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
Trigger strategy
Oligopoly
Payoff matrix
Pure monopoly
12. In game theory - a decision rule that describes the actions a player will take at each decision point
Strategy
Reservation Price
Duopoly
Cournot equilibrium
13. 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
Primary Sources of Monopolistic Power
Cournot equilibrium
Dominant strategy equilibrium
Two-part pricing
14. Specific assets - Economies of scale - Excess capacity - Reputation effects
Price discrimination
Perfect Competition Barriers to Entry
Network effects
Nonprime competition
15. A strategy in which a firm advertises a price and a promise to match any lower prices offered by a competitor
Double marginalization
Examples of Monopolistic Competition
Peak-load pricing
Price matching
16. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Pure monopoly
Prisoner's dilemma
Cournot equilibrium
Non-rivalrous consumption
17. Pricing strategy in which a firm optimally sets the internal price at which an upstream division wells an input to a downstream division
Simultaneous decision games
Transfer pricing
Natural Monopoly (local phone or electric company)
Payoff matrix
18. 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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19. Actions taken by firms to plan for and react to competition from rival firms
Third-degree price discrimination
Strategic behavior
Secure strategy
Payoff matrix
20. 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
Economies of scale
Undifferentiated
Network effects
Subgame perfect equilibrium
21. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Duopoly
Disappearing invisible hand
Repeated game
Natural Monopoly (local phone or electric company)
22. The situation when a firm's long-run average costs fall as it increases output
Perfect Competition Short Run Supply
Economies of scale
Sweezy oligopoly
Examples of Oligopoly
23. A situation in which a change in price strategy by one firm affects sales and profits of another
Network effects
Leader
Unbalanced Oligopoly
Mutual interdependence
24. All firms and individuals willing and able to buy or sell a particular product
Fair return price
Primary Sources of Monopolistic Power
Market
Perfect Competitor Characteristics
25. An equilibrium in a game in which players cooperate to increase their mutual payoff
Mixed (randomized) strategy
Follower
Bargaining Power of Suppliers
Cooperative equilibrium
26. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Credible threat
Strategic behavior
Two-part Tariff Method of Pricing
Fair return price
27. 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
Randomized pricing
Inter-industry competition
Non-price competition
Extensive-form game
28. A simpler way to operationalize first-degree price discrimination
Third-Degree Price Discrimination
What is game?
Economies of scale
Two-part Tariff Method of Pricing
29. Produce identical products
Perfect Competitor Characteristics
Undifferentiated
Socially optimal price
Non-price competition
30. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Examples of Oligopoly
Bargaining Power of Buyers
Patent
Price discrimination
31. Different units of a product are sold at different prices. Examples are buying in bulk - or - commodity-bundling
Payoff matrix
Second-Degree Price Discrimination
Homogenous oligopoly
Implicit Collusion
32. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Bargaining Power of Buyers
Follower
Maximizing profit in Oligopoly games
Herfindahl-Hirschman index (HHI)
33. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Trigger strategy
Non-rivalrous consumption
Subgame perfect equilibrium
Empty threat
34. 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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35. 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
Strategy
Nash equilibrium
Finding profit for oligopoly games
Second-Degree Price Discrimination
36. The situation that exists when two or more groups need each other and must depend on each other to accomplish a goal that is important to each of them
Inter-industry competition
Mutual Interdependence
Four-firm concentration ratio
Mixed (randomized) strategy
37. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Bargaining Power of Buyers
Strategy
Sequential game
Dominant firm oligopoly
38. Steel - autos - colas - airlines
High Price Elasticity
Four-firm concentration ratio
Fair return price
Examples of Oligopoly
39. 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
Sequential-move game
Leader
Imperfect competition
40. A product's ability to satisfy a large number of consumers at the same time
Cutthroat Competition
Credible threat
Cournot oligopoly
Simultaneous consumption
41. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Perfect Competition (characteristics)
Imperfect competition
Two-part pricing
Profit
42. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Commodity bundling
Reservation Price
Joint Venture
Third-degree price discrimination
43. The smallest quantity at which the average cost curve reaches its minimum
Tacit collusion
Bargaining Power of Buyers
Minimum efficient scale (full capacity)
Maximizing profit in Oligopoly games
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
Oligopoly
Contestable market
Rothschild index
Mixed (randomized) strategy
45. Variations on one good so that a firm can increase market sharea
One-shot game
Brand Multiplication
Kinked-demand curve
Rent-seeking behavior
46. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Third-degree price discrimination
Price war
Monopolistic Competition
Price discrimination
47. In game theory - a game that is played again sometime after the previous game ends
Non-cooperative behavior
Credible threat
Non-rivalrous consumption
Repeated game
48. Both players have dominant strategies and play them
Socially optimal price
Differentiated oligopoly
Dominant strategy equilibrium
Non-rivalrous consumption
49. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Pure monopoly
Equilibrium
Open Collusion
Payoff matrix
50. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Kinked-demand curve
Concentration Ratio
Price war
Import competition