5 Written questions
5 Matching questions
- Price Discrimination
- Mutual Interdependence
- Price Leadership
- Unbalanced Oligopoly
- a An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
- b A firm whose price decisions are tacitly accepted and followed by others in the industry.
- c 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
- d Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
- 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 measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
- A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
- A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
- The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
- Variations on one good so that a firm can increase market share.
5 True/False questions
Game Theory → 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.
Nash Equilibrium → Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
Payoff Matrix → A table that shows the payoffs that each firm earns from every combination of strategies by the firms.
Tit-for-Tat Strategy → A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Joint Venture → 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.