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5 Written questions

5 Matching questions

  1. Tit-for-Tat Strategy
  2. Balanced Oligopoly
  3. Concentration Ratio
  4. Nash Equilibrium
  5. Unbalanced Oligopoly
  1. a A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
  2. b An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.
  3. c An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
  4. d Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
  5. e 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 Multiple choice questions

  1. 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.
  2. A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
  3. The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
  4. A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
  5. A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.

5 True/False questions

  1. Price DiscriminationOffering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.

          

  2. MergerA combination of two or more companies into one company.

          

  3. GodfatherThe dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.

          

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

          

  5. Conglomerate MergerA merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears

          

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