5 Written questions
5 Matching questions
- Joint Venture
- Conglomerate Merger
- Concentration Ratio
- Nash Equilibrium
- Horizontal Merger
- 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
- 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 Any combination of strategies in which each players' strategy is his or her best choice, given the other players' strategies.
- d A merger of firms in unrelated industries. Example: If Purina Dow Chow merged with Pampers Diaper Company.
- e A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
5 Multiple choice questions
- The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
- An agreement among firms in a market about quantities to produce or prices to charge in attempts to limit competition.
- Variations on one good so that a firm can increase market share.
- The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
- 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
Price Leadership → A firm whose price decisions are tacitly accepted and followed by others in the industry.
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
Tit-for-Tat Strategy → A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
Vertical Merger → A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
Payoff Matrix → The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.