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5 Written questions

5 Matching questions

  1. Joint Venture
  2. Game Theory
  3. Conglomerate Merger
  4. Godfather
  5. Vertical Merger
  1. a The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
  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 A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
  4. d A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
  5. 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

  1. A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
  2. A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
  3. A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
  4. Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
  5. 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

  1. Kinked Demand CurveThe demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.

          

  2. Nash EquilibriumThe 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.

          

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

          

  4. 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

          

  5. Balanced OligopolyAn oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.