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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 - a game that is played again sometime after the previous game ends
Socially optimal price
Mutual interdependence
Secure strategy
Repeated game
2. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Mixed (randomized) strategy
Extensive-form game
Follower
Natural Monopoly (local phone or electric company)
3. A strategy or action that always provides the best outcome no matter what decisions rivals make
Rent-seeking behavior
Perfect Competitor Making a Profit
Import competition
Dominant strategy
4. Specific assets - Economies of scale - Excess capacity - Reputation effects
Perfect Competition Barriers to Entry
Merger
Price discrimination
Herfindahl-Hirschman index (HHI)
5. A strategy that guarantees the highest payoff given the worst possible scenario
Duopoly
Network effects
Secure strategy
Sequential-move game
6. The maximum price that a buyer is willing to pay for a good - or the minimum price that a seller will accept
Joint Venture
High Price Elasticity
Minimum efficient scale (full capacity)
Reservation Price
7. A condition describing a set of strategies in which no player can improve their payoff by unilaterally changing their own strategy given the other player's strategy
Patent
Monopolistic Competition
Perfect Competition Barriers to Entry
Nash equilibrium
8. In game theory - game where parties make their moves in turn - one party making the first move followed by the other
Second-Degree Price Discrimination
Strategic behavior
Sequential game
Trigger strategy
9. A situation where one firm is able to provide a service at a lower cost than could several competing firms
Empty threat
Natural Monopoly (local phone or electric company)
Fair return price
Dominant firm oligopoly
10. The competition that domestic firms encounter from the products and services of foreign producers
Import competition
Sequential game
Kinked demand curve model
Patent
11. Produce identical products
Finding profit for oligopoly games
Perfect Competitor Characteristics
Monopoly (characteristics)
Business strategy
12. 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
Non-cooperative equilibrium
Subgame perfect equilibrium
First-Degree Price Discrimination (Perfect)
Joint Venture
13. When managers are able to charge each consumer their reservation price. Examples are car and home sales
Cheating
Rent-seeking behavior
No cooperative equilibrium
First-Degree Price Discrimination (Perfect)
14. 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
Homogenous oligopoly
Lerner index
Randomized pricing
Double marginalization
15. Simultaneous move game that is not repeated
The Threat from Potential Entrants Firms
One-shot game
Business strategy
Open Collusion
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
Third-degree price discrimination
Oligopoly
Inefficiency
Ownership of a Key Input
17. When no one firm has a monopoly - but producers nonetheless realize that they can affect market prices. Firms compete but possess market power
Barrier to entry
Imperfect competition
Non-cooperative equilibrium
Subgame perfect equilibrium
18. 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
Covert Collusion
Import competition
Dominant firm oligopoly
Two-part pricing
19. The smallest quantity at which the average cost curve reaches its minimum
Minimum efficient scale (full capacity)
Follower
Perfect Competition Short Run Supply
Payoff matrix
20. Game in which one player makes a move after observing the other player's move
Sequential-move game
Perfect Competitor Characteristics
Monopolistic Competition
First-mover advantage
21. Steel - autos - colas - airlines
Normal-form game
Mixed (randomized) strategy
Ownership of a Key Input
Examples of Oligopoly
22. Operates like the alleged Mafia. Region division of the market among the firms in the industry
Dominant firm oligopoly
Examples of Monopolistic Competition
Tit-for-tat strategy
Open Collusion
23. In game theory - benefit obtained by party that moves first in a sequential game
Nonprime competition
First-mover advantage
Second-Degree Price Discrimination
Patent
24. Increases in the value of a product to each user - including existing users - as the total number of users rises
Sequential game
Network effects
Payoff matrix
Simultaneous consumption
25. 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
Mixed (randomized) strategy
Merger
Rothschild index
Imperfect competition
26. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Second-Degree Price Discrimination
No cooperative equilibrium
Import competition
Payoff matrix
27. The practice of charging different prices to consumers for the same good or service
Tit-for-tat strategy
Cross-subsidy pricing
Leader
Price discrimination
28. 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
Unbalanced Oligopoly
Non-cooperative equilibrium
Disappearing invisible hand
Empty threat
29. A situation in which a change in price strategy by one firm affects sales and profits of another
Mixed (randomized) strategy
Two-part Tariff Method of Pricing
Perfect Competitor Making a Profit
Mutual interdependence
30. Variations on one good so that a firm can increase market sharea
Conglomerate Merger
Bertrand oligopoly
Two-part Tariff Method of Pricing
Brand Multiplication
31. Long-run marginal cost curve above long-run average cost
Extensive-form game
Four-firm concentration ratio
Perfect Competition Long Run Supply
Empty threat
32. Sellers can identify different types of customers and offer each a different price. Examples are special prices for students or the elderly
Bargaining Power of Suppliers
Third-Degree Price Discrimination
Prisoner's dilemma
Conglomerate Merger
33. An establishment firm commits to setting price below the profit-maximizing level to prevent entry
Limit pricing
Tit-for-tat strategy
Bargaining Power of Suppliers
Minimum efficient scale (full capacity)
34. Takes Place inside the Mind of the consumer
Product Differentiation
Cooperative equilibrium
Trigger strategy
Implicit Collusion
35. Ignoring the effects of their actions on each others' profits
Ownership of a Key Input
Horizontal Merger/Integration
Non-cooperative behavior
Perfect Competitor Making a Profit
36. 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
Two-part Tariff Method of Pricing
Kinked-demand curve
Stackelberg oligopoly
Dominant strategy
37. Ranks industries according to how much social welfare would improve if the output in an industry were increased by a small amount
Network effects
Simultaneous decision games
Undifferentiated
Dansby-Willig performance index
38. In game theory - a decision rule that describes the actions a player will take at each decision point
Perfect Competition Barriers to Entry
Strategy
Barrier to entry
Commodity bundling
39. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Sweezy oligopoly
Natural Monopoly (local phone or electric company)
Differentiated oligopoly
Bargaining Power of Buyers
40. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Two-part Tariff Method of Pricing
Vertical Merger
Maximizing profit in Oligopoly games
Monopolistic Characteristics:
41. 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
Kinked demand curve model
Stackelberg oligopoly
Bargaining Power of Suppliers
Perfect Competition (characteristics)
42. A situation in which neither firm has incentive to change its output given the other firm's output
Cournot equilibrium
Cooperation
Two-part Tariff Method of Pricing
Merger
43. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Marginal Revenue
Covert Collusion
Implicit Collusion
Profit
44. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Dominant strategy
Collusion
Merger
Cheating
45. When the decisions of two or more firms significantly affect each others' profits
Finding profit for oligopoly games
Interdependence
Non-cooperative behavior
Kinked demand curve model
46. 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
Collusion
Rent-seeking behavior
Conglomerate Merger
Competitive market
47. Face competition from companies that currently are not in the market but might enter
Leader
The Threat from Potential Entrants Firms
Bertrand oligopoly
Prisoners' dilemma
48. Revenue-Costs
Rent-seeking behavior
Transfer pricing
Covert Collusion
Profit
49. The physical characteristics of the market within which firms interact
Market Structure
Price war
Mixed (randomized) strategy
Secure strategy
50. Many buyers and sellers - product homogeneity - low cost and accurate information - free entry and exit - best regarded as a benchmark
Economies of scale
Disappearing invisible hand
Differentiated oligopoly
Perfect Competition (characteristics)