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5 Written questions

5 Matching questions

  1. Joint Venture
  2. Conglomerate Merger
  3. Concentration Ratio
  4. Nash Equilibrium
  5. Horizontal Merger
  1. a A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
  2. 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.
  3. c Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
  4. d A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
  5. e A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears

5 Multiple choice questions

  1. The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
  2. An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.
  3. Variations on one good so that a firm can increase market share.
  4. The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
  5. 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

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

          

  2. Mutual InterdependenceThe 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

          

  3. Tit-for-Tat StrategyA pricing strategy in game theory in which firms continue to match each others' pricing strategy.

          

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

          

  5. Payoff MatrixThe dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.