5 Written questions
5 Matching questions
- Vertical Merger
- Kinked Demand Curve
- Price Leadership
- Joint Venture
- a A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- b 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.
- c The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
- d A firm whose price decisions are tacitly accepted and followed by others in the industry.
- e The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
5 Multiple choice questions
- A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
- 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
- Variations on one good so that a firm can increase market share.
- 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.
5 True/False questions
Tit-for-Tat Strategy → A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
Unbalanced Oligopoly → An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.
Price Discrimination → Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
Nash Equilibrium → Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
Prisoners' Dilemma → A firm whose price decisions are tacitly accepted and followed by others in the industry.