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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. The derivative of total revenue
Monopolistic Characteristics:
First-Degree Price Discrimination (Perfect)
Marginal Revenue
Ownership of a Key Input
2. 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
Joint Venture
Transfer pricing
Inter-industry competition
Product Differentiation
3. A firm whose price decisions are tacitly accepted and followed by others in the industry
Import competition
Price Leadership
Sweezy oligopoly
Examples of Oligopoly
4. An oligopoly in which the firms produce a differentiated product
Differentiated oligopoly
Equilibrium
Strategic behavior
Fair return price
5. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Present Value (PV)
Finding profit for oligopoly games
Implicit Collusion
Two-part pricing
6. Price Sensitive
High Price Elasticity
Cheating
Brand Multiplication
Price matching
7. Steel - autos - colas - airlines
Examples of Oligopoly
Secure strategy
Four-firm concentration ratio
Imperfect competition
8. 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)
Non-rivalrous consumption
Pure monopoly
Stackelberg oligopoly
Dominant firm oligopoly
9. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Tacit collusion
Cournot oligopoly
Rent-seeking behavior
10. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Monopoly (characteristics)
Duopoly
Maximizing profit in Oligopoly games
Horizontal Merger/Integration
11. Maximize economic profit by producing the quantity at which MC=MR
Normal-form game
Nonprime competition
Commodity bundling
Maximizing profit in Oligopoly games
12. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Inefficiency
Dansby-Willig performance index
Rothschild index
Ownership of a Key Input
13. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Open Collusion
Fair return price
Joint Venture
Perfect Competitor Making a Profit
14. The competition for sales between the products of one industry and the products of another industry
Examples of Oligopoly
Inter-industry competition
Mixed (randomized) strategy
Empty threat
15. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Simultaneous decision games
Undifferentiated
Kinked-demand curve
Cournot equilibrium
16. A game that is played over and over again forever and in which players receive payoffs during each play of the game
Tit-for-tat strategy
Indefinitely repeated game
Payoff matrix
Nonprime competition
17. 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
Third-degree price discrimination
Dominant strategy equilibrium
Mutual Interdependence
Common knowledge
18. The smallest quantity at which the average cost curve reaches its minimum
Minimum efficient scale (full capacity)
Competitive market
Nash equilibrium
Cournot oligopoly
19. In game theory - benefit obtained by party that moves first in a sequential game
No cooperative equilibrium
Tacit collusion
Imperfect competition
First-mover advantage
20. 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
Mixed (randomized) strategy
What is game?
Inefficiency
Block pricing
21. Specific assets - Economies of scale - Excess capacity - Reputation effects
Extensive-form game
Perfect Competition Barriers to Entry
Market Structure
Cheating
22. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company
Conglomerate Merger
Rothschild index
Merger
Natural Monopoly (local phone or electric company)
23. First firm to set its output (Stackelberg's model)
Third-Degree Price Discrimination
Profit
Leader
Dansby-Willig performance index
24. In game theory - a decision rule that describes the actions a player will take at each decision point
Two-part pricing
Strategy
Mutual Interdependence
Present Value (PV)
25. 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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26. In game theory - a statement of harmful intent easily dismissed by recipient because threat not considered believable
Subgame perfect equilibrium
Empty threat
Perfect Competition (characteristics)
Third-Degree Price Discrimination
27. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Non-rivalrous consumption
Imperfect competition
Common knowledge
Limit price
28. 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
Double marginalization
Socially optimal price
Market Structure
Lerner index
29. 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
Simultaneous consumption
Dominant firm oligopoly
Collusion
Perfect Competitor Characteristics
30. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Differentiated oligopoly
Competitive market
Randomized pricing
Two-part pricing
31. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Payoff matrix
Cheating
Trigger strategy
Peak-load pricing
32. 2 firms - simplest case in an oligopoly. Profits higher if limiting their production
Duopoly
Cutthroat Competition
Cooperative equilibrium
Concentration Ratio
33. A situation in which a change in price strategy by one firm affects sales and profits of another
Covert Collusion
Mutual interdependence
Economies of scale
Herfindahl-Hirschman index (HHI)
34. Where a firm can charge different groups of consumers different prices for the same product. Example: student or senior discounts
Extensive-form game
Perfect Competition Short Run Supply
Imperfect competition
Third-degree price discrimination
35. 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
Simultaneous consumption
Collusion
Non-cooperative equilibrium
Randomized pricing
36. A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Concentration Ratio
Oligopoly
Payoff matrix
High Price Elasticity
37. Increases in the value of a product to each user - including existing users - as the total number of users rises
Extensive-form game
Simultaneous-move game
Network effects
Homogenous oligopoly
38. 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
Bargaining Power of Suppliers
Sweezy oligopoly
Undifferentiated
Oligopoly
39. Both players have dominant strategies and play them
Stackelberg oligopoly
Dominant strategy equilibrium
Nash equilibrium
Dominant firm oligopoly
40. Demand line is above ATC curve
Nonprime competition
Perfect Competitor Making a Profit
One-shot game
Second-Degree Price Discrimination
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)
Mutual interdependence
Barrier to entry
Simultaneous consumption
Covert Collusion
42. 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
Collusion
Non-rivalrous consumption
First-Degree Price Discrimination (Perfect)
Bargaining Power of Suppliers
43. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Concentration Ratio
Bargaining Power of Suppliers
Product differentiation
First-Degree Price Discrimination (Perfect)
44. Game in which one player makes a move after observing the other player's move
Sequential-move game
Mixed (randomized) strategy
What is game?
Primary Sources of Monopolistic Power
45. Ignoring the effects of their actions on each others' profits
Non-cooperative behavior
Contestable market
Interdependence
Peak-load pricing
46. 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
Subgame perfect equilibrium
Lerner index
Commodity bundling
Monopolistic Competition
47. The actions by persons - firms - or unions to gain special benefits from government at taxpayer's or someone else's expense
Rent-seeking behavior
Undifferentiated
Contestable market
Concentration Ratio
48. Involves price-fixing
Covert Collusion
Product Differentiation
Natural Monopoly (local phone or electric company)
Simultaneous consumption
49. Simultaneous move game that is not repeated
One-shot game
Dansby-Willig performance index
Finding profit for oligopoly games
Product differentiation
50. An equilibrium in a game in which players cooperate to increase their mutual payoff
Network effects
Homogenous oligopoly
Cooperative equilibrium
Normal-form game