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5 Written questions

5 Matching questions

  1. Game Theory
  2. Cartel
  3. Price Discrimination
  4. Vertical Merger
  5. Nash Equilibrium
  1. a Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
  2. b Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
  3. c A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
  4. d 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. e A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.

5 Multiple choice questions

  1. A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
  2. A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
  3. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
  4. A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
  5. 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

5 True/False questions

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

          

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

          

  3. Concentration RatioA measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market

          

  4. Prisoners' DilemmaA particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.

          

  5. CollusionAn agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.

          

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