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5 Written questions

5 Matching questions

  1. Vertical Merger
  2. Concentration Ratio
  3. Prisoners' Dilemma
  4. Unbalanced Oligopoly
  5. Collusion
  1. a An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
  2. b A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
  3. c A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
  4. d 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. e An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.

5 Multiple choice questions

  1. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
  2. Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
  3. A combination of two or more companies into one company.
  4. The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
  5. 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.

5 True/False questions

  1. Price LeadershipA firm whose price decisions are tacitly accepted and followed by others in the industry.

          

  2. CartelA group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.

          

  3. Brand MultiplicationOffering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.

          

  4. Nash EquilibriumAny combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.

          

  5. Balanced OligopolyAn oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.

          

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