5 Written questions
5 Matching questions
- Joint Venture
- Game Theory
- Conglomerate Merger
- Vertical Merger
- a The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
- b 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.
- c A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- d A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- e 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 Multiple choice questions
- A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
- A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
- A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
- Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
- 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 True/False questions
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.
Nash Equilibrium → 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.
Merger → A combination of two or more companies into one company.
Mutual Interdependence → 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
Balanced Oligopoly → An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.