← C12-Oligopoly Test
5 Written Questions
5 Matching Questions
- Brand Multiplication
- Conglomerate Merger
- Mutual Interdependence
- a Variations on one good so that a firm can increase market share.
- b 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
- c A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- d An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.
- e A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
5 Multiple Choice Questions
- A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
- A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- A firm whose price decisions are tacitly accepted and followed by others in the industry.
- 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.
- A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
5 True/False Questions
Balanced Oligopoly → An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
Kinked Demand Curve → The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
Merger → A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
Payoff Matrix → A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
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