5 Written questions
5 Matching questions
- Vertical Merger
- Concentration Ratio
- Prisoners' Dilemma
- Unbalanced Oligopoly
- a An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
- b A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- 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.
- 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
- 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
- A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
- A combination of two or more companies into one company.
- The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
- 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
Price Leadership → A firm whose price decisions are tacitly accepted and followed by others in the industry.
Cartel → A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
Brand Multiplication → 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.
Balanced Oligopoly → An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.