5 Written Questions
5 Matching Questions
- Price Leadership
- Balanced Oligopoly
- Game Theory
- Kinked Demand Curve
- a 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.
- b The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
- c An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.
- d A firm whose price decisions are tacitly accepted and followed by others in the industry.
- e An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.
5 Multiple Choice Questions
- Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
- A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- A combination of two or more companies into one company.
- A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
- A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
5 True/False Questions
Mutual Interdependence → 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.
Prisoners' Dilemma → A firm whose price decisions are tacitly accepted and followed by others in the industry.
Payoff Matrix → A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
Brand Multiplication → Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
Godfather → 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.