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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. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Cournot equilibrium
Commodity bundling
Tacit collusion
Dansby-Willig performance index
2. A situation in which competing firms must make their individual decisions without knowing the decisions of their rivals
Two-part pricing
Lerner index
Simultaneous decision games
Tacit collusion
3. 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
Duopoly
Horizontal Merger/Integration
Lerner index
Two-part Tariff Method of Pricing
4. The physical characteristics of the market within which firms interact
Market Structure
Socially optimal price
Perfect Competitor Characteristics
Trigger strategy
5. 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.)
Monopolistic Characteristics:
Dominant strategy
Cross-subsidy pricing
Limit pricing
6. If production of a good requires a particular input - then control of that input can be a barrier to entry
Market
Ownership of a Key Input
Cutthroat Competition
Patent
7. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Differentiated oligopoly
Primary Sources of Monopolistic Power
Block pricing
Socially optimal price
8. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Undifferentiated
Stackelberg oligopoly
Covert Collusion
9. Rival who sets its output after the leader (Stackelberg's model)
Indefinitely repeated game
Limit pricing
Follower
Examples of Oligopoly
10. 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
Four-firm concentration ratio
Subgame perfect equilibrium
Examples of Oligopoly
Kinked demand curve model
11. Variations on one good so that a firm can increase market sharea
Stackelberg oligopoly
Indefinitely repeated game
Brand Multiplication
Common knowledge
12. Rules - strategies - payoffs - outcomes
What is game?
Sequential-move game
Cross-subsidy pricing
Merger
13. 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)
Payoff matrix
Price discrimination
Stackelberg oligopoly
Imperfect competition
14. 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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15. Involves price-fixing
Covert Collusion
Imperfect competition
Examples of Oligopoly
Simultaneous decision games
16. 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
Payoff
Fair return price
Economies of scale
Oligopoly
17. 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
Cournot equilibrium
Cross-subsidy pricing
Secure strategy
Bargaining Power of Suppliers
18. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Leader
Commodity bundling
Normal-form game
Collusion
19. An equilibrium in a game in which players cooperate to increase their mutual payoff
Imperfect competition
Cooperative equilibrium
Four-firm concentration ratio
Duopoly
20. Using advertising and other means to try to increase a firm's sales
Two-part pricing
Double marginalization
Maximizing profit in Oligopoly games
Non-price competition
21. Demand line is above ATC curve
Randomized pricing
Network effects
Tacit collusion
Perfect Competitor Making a Profit
22. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Cournot equilibrium
Non-cooperative equilibrium
Network effects
Non-rivalrous consumption
23. A situation in which no one wants to change his or her behavior
Equilibrium
Nonprime competition
Perfect Competitor Characteristics
Patent
24. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Stackelberg oligopoly
Credible threat
Two-part pricing
Reservation Price
25. 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)
Monopolistic Competition
Business strategy
Barrier to entry
Imperfect competition
26. First firm to set its output (Stackelberg's model)
Leader
Import competition
Vertical Merger
Perfect Competitor Characteristics
27. Toothpaste - shampoo - restaurants - banks
Sweezy oligopoly
Minimum efficient scale (full capacity)
Perfect Competition (characteristics)
Examples of Monopolistic Competition
28. The exclusive right to a product for a period of 20 years from the date the product is invented
Patent
Market
Undifferentiated
Commodity bundling
29. 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
Rothschild index
Monopoly (characteristics)
Cheating
Four-firm concentration ratio
30. Maximize economic profit by producing the quantity at which MC=MR
What is game?
Block pricing
Maximizing profit in Oligopoly games
Network effects
31. 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
Repeated game
Monopoly (characteristics)
Tit-for-tat strategy
32. Industry in which (1) few firms serving many customers; (2) firms produce identical products t constant marginal cost; (3) firms compete in price and react optimally to competitor's prices; (4) consumers have perfect information and here are no trans
Merger
Bertrand oligopoly
Import competition
Perfect Competitor Making a Profit
33. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Concentration Ratio
Implicit Collusion
Simultaneous consumption
Minimum efficient scale (full capacity)
34. Game in which each player makes decisions without knowledge of the other player's decisions
Lerner index
Reservation Price
Simultaneous-move game
Undifferentiated
35. Price Sensitive
Competitive market
Profit
Import competition
High Price Elasticity
36. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Socially optimal price
Dominant firm oligopoly
Rent-seeking behavior
Herfindahl-Hirschman index (HHI)
37. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Maximizing profit in Oligopoly games
Duopoly
Horizontal Merger/Integration
Market Structure
38. Revenue-Costs
Two-part pricing
Socially optimal price
Profit
Limit pricing
39. A representation of a game indicating the players - their possible strategies - and the payoffs resulting from alternative strategies
Normal-form game
Cross-subsidy pricing
Minimum efficient scale (full capacity)
Profit
40. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Marginal Revenue
Transfer pricing
Mixed (randomized) strategy
Payoff matrix
41. Pricing strategy in which a firm intentionally varies its price in an attempt to "hide" price information from consumers and rivals
Concentration Ratio
Present Value (PV)
Randomized pricing
Dansby-Willig performance index
42. Cooperation among firms that does not involve an explicit agreement
Sequential-move game
Imperfect competition
Peak-load pricing
Tacit collusion
43. Both players have dominant strategies and play them
Minimum efficient scale (full capacity)
Two-part pricing
Strategy
Dominant strategy equilibrium
44. Ignoring the effects of their actions on each others' profits
Perfect Competition Short Run Supply
Non-price competition
Non-cooperative behavior
Normal-form game
45. Price of a product that enables its producer to obtain a normal profit & that is equal to the ATC of producing it
Payoff matrix
Bargaining Power of Buyers
Fair return price
Bertrand oligopoly
46. The demand curve for a non-collusive oligopolist - which is based on the assumption that rivals will match a price decrease and will ignore a price increase
Conglomerate Merger
Kinked-demand curve
Contestable market
Commodity bundling
47. The percentage of the total industry sales accounted for by the four largest firms in the industry. OUTPUT of 4 largest firms over TOTAL output in industry. C4=(S1+...+S4)/St or (w1+...+w4)
Common knowledge
Price discrimination
Four-firm concentration ratio
Cross-subsidy pricing
48. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Payoff matrix
Collusion
Bargaining Power of Suppliers
Tacit collusion
49. All firms and individuals willing and able to buy or sell a particular product
Bargaining Power of Buyers
Market
Transfer pricing
Market Structure
50. An attempt by a firm to convince buyers that its product is different from the products of other firms in the industry
Dominant strategy
Kinked-demand curve
Network effects
Product differentiation