5 Written Questions
5 Matching Questions
- Unbalanced Oligopoly
- Horizontal Merger
- Vertical Merger
- Balanced Oligopoly
- a An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
- b A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
- c A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- d An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.
- e A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
5 Multiple Choice Questions
- Variations on one good so that a firm can increase market share.
- 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.
- The theory that studies decision making in situations in which one player anticipates the reactions of other players to its own actions. Firms are mutually interdendent.
- An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.
- A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
5 True/False Questions
Nash Equilibrium → Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
Concentration Ratio → A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Tit-for-Tat Strategy → A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
Godfather → The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
Mutual Interdependence → 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