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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. Single firm is sole producer of a product for which there are no close substitutes
Pure monopoly
Kinked demand curve model
Dansby-Willig performance index
Examples of Oligopoly
2. Single seller in an industry - Strong barriers to entry - Profit maximization - faces market demand and sets MR=MC - Unexploited gains from trade
Second-Degree Price Discrimination
Rent-seeking behavior
Business strategy
Monopoly (characteristics)
3. 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
Simultaneous consumption
Bargaining Power of Suppliers
Non-price competition
Socially optimal price
4. A strategy whereby a player randomizes over two or more available actions in order to keep rivals from being able to predict his action
Trigger strategy
Competitive market
Two-part Tariff Method of Pricing
Mixed (randomized) strategy
5. 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)
Payoff
Barrier to entry
Simultaneous-move game
Perfect Competition (characteristics)
6. When a manager makes a noncooperative decision
Market
Economies of scale
Cheating
Simultaneous consumption
7. Actions taken by firms to plan for and react to competition from rival firms
Primary Sources of Monopolistic Power
Strategic behavior
Inter-industry competition
Two-part pricing
8. Rival who sets its output after the leader (Stackelberg's model)
Rothschild index
Merger
Follower
Rent-seeking behavior
9. 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
Inter-industry competition
Kinked-demand curve
Stackelberg oligopoly
Covert Collusion
10. Toothpaste - shampoo - restaurants - banks
First-mover advantage
Examples of Monopolistic Competition
Sweezy oligopoly
Present Value (PV)
11. If production of a good requires a particular input - then control of that input can be a barrier to entry
Price Leadership
Commodity bundling
Cross-subsidy pricing
Ownership of a Key Input
12. Specific assets - Economies of scale - Excess capacity - Reputation effects
Maximizing profit in Oligopoly games
Monopolistic Competition
Perfect Competition Barriers to Entry
Dominant strategy equilibrium
13. 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
Oligopoly
Finding profit for oligopoly games
Trigger strategy
One-shot game
14. 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
No cooperative equilibrium
Subgame perfect equilibrium
Mutual Interdependence
Natural Monopoly (local phone or electric company)
15. An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them
Brand Multiplication
Four-firm concentration ratio
Unbalanced Oligopoly
Limit pricing
16. Pricing strategy in which higher prices are charged during peak hours than during off-peak hours
Limit pricing
Follower
Peak-load pricing
Simultaneous decision games
17. The exclusive right to a product for a period of 20 years from the date the product is invented
Simultaneous decision games
Patent
Nash equilibrium
Two-part Tariff Method of Pricing
18. (1) Economies of Scale; (2) Economies of Scope; (3) Cost Complementarity; and (4)Patents & Other Legal Barriers
Primary Sources of Monopolistic Power
Present Value (PV)
Commodity bundling
Mutual Interdependence
19. Sets the price at the highest level that is consistent with keeping the potential entrant out. -The strategy of reducing the price to deter entry
Strategy
Sequential-move game
Limit pricing
Perfect Competitor Making a Profit
20. Steel - autos - colas - airlines
Duopoly
Strategy
Collusion
Examples of Oligopoly
21. 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
Lerner index
Randomized pricing
Implicit Collusion
Primary Sources of Monopolistic Power
22. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition
Leader
Collusion
Non-rivalrous consumption
Inefficiency
23. A simpler way to operationalize first-degree price discrimination
Perfect Competitor Making a Profit
Dansby-Willig performance index
Two-part Tariff Method of Pricing
Ownership of a Key Input
24. In game theory - benefit obtained by party that moves first in a sequential game
Follower
No cooperative equilibrium
First-mover advantage
Mutual interdependence
25. If buyers have enough bargaining power - they can insist on lower prices - higher-quality products - or additional services
Cooperative equilibrium
Repeated game
Prisoner's dilemma
Bargaining Power of Buyers
26. A table that shows the payoffs that each firm earns from every combination of strategies by the firms
Payoff matrix
Commodity bundling
Non-price competition
Herfindahl-Hirschman index (HHI)
27. Demand line is above ATC curve
Extensive-form game
Rent-seeking behavior
Perfect Competitor Making a Profit
Prisoner's dilemma
28. Intense competition in which competitors cut retail prices to gain business--oligopolistic competition
Natural Monopoly (local phone or electric company)
Price war
Product Differentiation
Maximizing profit in Oligopoly games
29. The derivative of total revenue
Marginal Revenue
Double marginalization
Repeated game
Payoff
30. 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
Oligopoly
Minimum efficient scale (full capacity)
Kinked-demand curve
31. A table that shows the payoffs for every possible action by each player for every possible action by the other player
Common knowledge
Simultaneous decision games
Nonprime competition
Payoff matrix
32. 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
Kinked demand curve model
Primary Sources of Monopolistic Power
Transfer pricing
Contestable market
33. 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
Equilibrium
Follower
Indefinitely repeated game
Finding profit for oligopoly games
34. When something can be consumed without reducing the benefits available for subsequent consumption; can be consumed without supporting rivalry between consumers
Commodity bundling
Extensive-form game
Price Leadership
Non-rivalrous consumption
35. A situation in which neither firm has incentive to change its output given the other firm's output
Two-part Tariff Method of Pricing
Kinked demand curve model
Payoff
Cournot equilibrium
36. When firms limit production and raise prices in a way that raises each others' profits - even though they have not made any formal agreement
Lerner index
Tacit collusion
Prisoners' dilemma
Vertical Merger
37. In game theory - a game that is played again sometime after the previous game ends
Examples of Monopolistic Competition
Repeated game
Import competition
Third-degree price discrimination
38. Competition based on factors that are not related to price - such as product quality - service and financing - business location - and reputation
Vertical Merger
Nash equilibrium
Business strategy
Nonprime competition
39. 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
Product Differentiation
Leader
Dominant strategy
Cournot oligopoly
40. 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
Two-part pricing
Contestable market
Cutthroat Competition
Implicit Collusion
41. A merger between firms who have a buyer/supplier relationship. Example: BF Goodrich merging with rubber plantations
Vertical Merger
Randomized pricing
Normal-form game
Non-price competition
42. Game in which each player makes decisions without knowledge of the other player's decisions
Leader
Double marginalization
Fair return price
Simultaneous-move game
43. Face competition from companies that currently are not in the market but might enter
The Threat from Potential Entrants Firms
Third-Degree Price Discrimination
Maximizing profit in Oligopoly games
Sweezy oligopoly
44. The reward received by a player in a game - such as the profit earned by an oligopolist
Bargaining Power of Suppliers
Strategy
Payoff
First-Degree Price Discrimination (Perfect)
45. A table showing - for every possible combination of decisions players can make - the outcomes or "payoffs" for each of the players in each decision combination
First-Degree Price Discrimination (Perfect)
Market Structure
Payoff table
Kinked-demand curve
46. Multiple firms make the same pricing decisions even though they have not explicitly consulted with each other
Implicit Collusion
Nonprime competition
Non-rivalrous consumption
Transfer pricing
47. 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
Cournot oligopoly
Dominant strategy equilibrium
Two-part pricing
Joint Venture
48. An equilibrium in a game in which players do not cooperate but pursue their own self-interest
Nonprime competition
Perfect Competition Short Run Supply
No cooperative equilibrium
Minimum efficient scale (full capacity)
49. A pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product
Cross-subsidy pricing
Price war
Perfect Competition Barriers to Entry
Homogenous oligopoly
50. An index of market concentration. Sum of squared market shares of all the firms in the industry times 10K HHI=10 - 000Σwi2
Import competition
Perfect Competitor Making a Profit
Herfindahl-Hirschman index (HHI)
One-shot game