5 Written questions
5 Matching questions
- Horizontal Merger
- Joint Venture
- Price Leadership
- Tit-for-Tat Strategy
- a 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.
- b A combination of two or more companies into one company.
- c A merger between two firms in the same industry. Example: 2004 K-Mart merged with Sears
- d A firm whose price decisions are tacitly accepted and followed by others in the industry.
- e A pricing strategy in game theory in which firms continue to match each others' pricing strategy.
5 Multiple choice questions
- The demand curve faced by an oligopolist. The curve is more elastic when the firm raises its price than when it lowers its price.
- The dominate firm in the oligopoly, whose pricing decisions are tacitly followed. The Godfather is the price leader.
- Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
- A merger between firms who have a buyer/supplier relationship. Example: BFGoodrich merging with rubber plantations.
- 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.
Balanced Oligopoly → An oligopoly in which the sales of the leading (top four) firms are distributed unevenly among them.
Collusion → A group of firms that collude to limit competition in a market by negotiating and accepting agreed-upon prices and market shares.
Prisoners' Dilemma → Offering specific goods or services at different prices to different segments of the market. Example: First class versus business class on airlines.
Unbalanced Oligopoly → An oligopoly in which the sales of the leading (top four) firms are relatively balanced among them.