5 Written questions
5 Matching questions
- Unbalanced Oligopoly
- Mutual Interdependence
- Joint Venture
- a A combination of two or more companies into one company.
- b An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.
- c 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.
- d 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
- e An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
5 Multiple choice questions
- A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
- A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
- A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.
5 True/False questions
Concentration Ratio → A measure of market power - the percentage of all sales that is accounted for by the four or eight largest firms in the market
Prisoners' Dilemma → A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial to do so.
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.
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.
Price Leadership → A table that shows the payoffs that each firm earns from every combination of strategies by the firms.