Exam 8: Game Theory and Oligopoly

Best Lights wants to prevent Bright Lights from entering the light bulb market. If Best Lights advertises that it will always undercut any competitor's price, the effect of advertising __Best Lights' profits due to its cost and _ Best Lights' profits due to a(n)____in its demand.

(Multiple Choice)

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Question 41

Pizza at Home is a frozen pizza company that supplies several large grocery store chains. The managers of Pizza at Home are currently negotiating a four year contract with Saucy Pizza, a manufacturer of pizza sauce. Saucy Pizza will supply a specified quantity of canned tomato sauce to Pizza at Home over a four year period; however; Pizza at Home can ends its contract with Saucy Pizza at the end of the first, second, or third years if Saucy Pizza does not supply quality tomato sauce. What can the manager of Pizza at Home do to avoid the end- game problem?

(Multiple Choice)

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Question 42

Cooperation is possible in a game if both firms know the final period of the game.

(Multiple Choice)

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Question 43

-Refer to the payoff matrix above. If Best Lights and Bright Lights both set a High Price, the profit for Best Lights are _ and the profit for Bright Lights are _ than if both firms set a Low Price.

(Multiple Choice)

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Question 44

-Refer to the payoff matrix above. If Best Lights and Bright Lights both know that the above game will be played exactly four times, which of the following will be the outcome of the game in each of the four periods?

(Multiple Choice)

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Question 45

-Refer to the payoff matrix above. Which of the following is true for Bright Lights?

(Multiple Choice)

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Question 46

-Refer to the payoff matrix above. Which of the following is true for Camping R Us?

(Multiple Choice)

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Question 47

If Pizza at Home and Pizza in Your Fridge are two competing frozen pizza firms and Pizza at Home wants to make a threat to Pizza in Your Fridge more credible, they can do all of the following except which one?

(Multiple Choice)

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Question 48

If the manager of Propane R US wants to enhance the credibility of a threat it made to its rival firms, the managers of Propane R Us should keep their rivals in the dark about their planned actions.

(True/False)

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Question 49

-Refer to the payoff matrix above. Which of the following is the iterated elimination of dominated strategies outcome of the game?

(Multiple Choice)

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Question 50

Pizza at Home is a frozen pizza company that supplies several large grocery store chains. The managers of Pizza at Home are currently negotiating a four year contract with Saucy Pizza, a manufacturer of pizza sauce. Saucy Pizza will supply a specified quantity of canned tomato sauce to Pizza at Home over a four year period; however; Pizza at Home can ends its contract with Saucy Pizza at the end of the first, second, or third years if Saucy Pizza does not supply quality tomato sauce. The manager of the Pizza at Home should be most concerned about the quality of the tomato sauce in which year?

(Multiple Choice)

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Question 51

Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies. -Refer to the payoff matrix above. Which is the equilibrium of the game using the Pareto criterion?

(Multiple Choice)

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Question 52

-Refer to the payoff matrix above. Which of the following is the pure- strategy Nash Equilibrium?

(Multiple Choice)

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Question 53

The mangers of Happy Campers and Camp with Us are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?

(Multiple Choice)

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Question 54

-Refer to the payoff matrix above. The Set High Price/Set High Price outcome is the _________.

(Multiple Choice)

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Question 55

All of the following are elements of a game except which one?

(Multiple Choice)

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Question 56

Camp with Us and Happy Campers compete in the market for campers. Each firm must decide each season if they are going to offer special financing or not. The above payoff matrix shows each firm's net economic profit at each pair of strategies. -Refer to the payoff matrix above. If Camp R Us announces that it will offer special financing, Happy Campers believe Camp R Us as their incentives ______ align.

(Multiple Choice)

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Question 57

In an entry game, it is not necessary for managers to consider the best response of their competitor(s).

(True/False)

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Question 58

Jet Cruises wants to prevent Easy Sail from entering the sailboat market. The above game tree illustrates the different strategi corresponding payoffs for the two firms. Both Jet Cruises and Easy Sail have the same strategies of advertising (Ad) or not ad (No Ad). The payoffs represent net profit in millions. -If Jet Cruises chooses to No Ad and Easy Sail then chooses to No Ad, Jet Cruises earns million in net profit and Easy Sail earns _ million.

(Multiple Choice)

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Question 59

Mixed strategies are inherently random.

(True/False)

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Question 60

Showing 41 - 60 of 100

Best Lights wants to prevent Bright Lights from entering the light bulb market. If Best Lights advertises that it will always undercut any competitor's price, the effect of advertising __Best Lights' profits due to its cost and _ Best Lights' profits due to a(n)____in its demand.

Cooperation is possible in a game if both firms know the final period of the game.

-Refer to the payoff matrix above. If Best Lights and Bright Lights both set a High Price, the profit for Best Lights are _ and the profit for Bright Lights are _ than if both firms set a Low Price.

-Refer to the payoff matrix above. If Best Lights and Bright Lights both know that the above game will be played exactly four times, which of the following will be the outcome of the game in each of the four periods?

-Refer to the payoff matrix above. Which of the following is true for Bright Lights?

-Refer to the payoff matrix above. Which of the following is true for Camping R Us?

If Pizza at Home and Pizza in Your Fridge are two competing frozen pizza firms and Pizza at Home wants to make a threat to Pizza in Your Fridge more credible, they can do all of the following except which one?

If the manager of Propane R US wants to enhance the credibility of a threat it made to its rival firms, the managers of Propane R Us should keep their rivals in the dark about their planned actions.

-Refer to the payoff matrix above. Which of the following is the iterated elimination of dominated strategies outcome of the game?

-Refer to the payoff matrix above. Which of the following is the pure- strategy Nash Equilibrium?

The mangers of Happy Campers and Camp with Us are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?

-Refer to the payoff matrix above. The Set High Price/Set High Price outcome is the _________.

All of the following are elements of a game except which one?

In an entry game, it is not necessary for managers to consider the best response of their competitor(s).

Mixed strategies are inherently random.

Managerial Economics and Decision Making

Demand and Supply

Measuring and Using Demand

Production and Costs

Perfect Competition

Monopoly and Monopolistic Competition

Cartels and Oligopoly

A Managers Guide to Antitrust Policy

Advanced Pricing Decisions

Decisions About Vertical Integration and Distribution

Decisions About Production, Products, and Location

Marketing Decisions: Advertising and Promotion

Business Decisions Under Uncertainty

Managerial Decisions About Information

Using Present Value to Make Multi-Period Managerial Decisions

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Exam 8: Game Theory and Oligopoly

Best Lights wants to prevent Bright Lights from entering the light bulb market. If Best Lights advertises that it will always undercut any competitor's price, the effect of advertising ______Best Lights' profits due to its cost and _______ Best Lights' profits due to a(n)______in its demand.

Cooperation is possible in a________ game if both firms ________know the final period of the game.

-Refer to the payoff matrix above. If Best Lights and Bright Lights both set a High Price, the profit for Best Lights are _________ and the profit for Bright Lights are _________ than if both firms set a Low Price.

-Refer to the payoff matrix above. If Best Lights and Bright Lights both know that the above game will be played exactly four times, which of the following will be the outcome of the game in each of the four periods?

-Refer to the payoff matrix above. Which of the following is true for Bright Lights?

-Refer to the payoff matrix above. Which of the following is true for Camping R Us?

If Pizza at Home and Pizza in Your Fridge are two competing frozen pizza firms and Pizza at Home wants to make a threat to Pizza in Your Fridge more credible, they can do all of the following except which one?

If the manager of Propane R US wants to enhance the credibility of a threat it made to its rival firms, the managers of Propane R Us should keep their rivals in the dark about their planned actions.

-Refer to the payoff matrix above. Which of the following is the iterated elimination of dominated strategies outcome of the game?

-Refer to the payoff matrix above. Which of the following is the pure- strategy Nash Equilibrium?

The mangers of Happy Campers and Camp with Us are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?

-Refer to the payoff matrix above. The Set High Price/Set High Price outcome is the _________.

All of the following are elements of a game except which one?

In an entry game, it is not necessary for managers to consider the best response of their competitor(s).

Mixed strategies are inherently random.

Managerial Economics and Decision Making

Demand and Supply

Measuring and Using Demand

Production and Costs

Perfect Competition

Monopoly and Monopolistic Competition

Cartels and Oligopoly

A Managers Guide to Antitrust Policy

Advanced Pricing Decisions

Decisions About Vertical Integration and Distribution

Decisions About Production, Products, and Location

Marketing Decisions: Advertising and Promotion

Business Decisions Under Uncertainty

Managerial Decisions About Information

Using Present Value to Make Multi-Period Managerial Decisions

Filters

Best Lights wants to prevent Bright Lights from entering the light bulb market. If Best Lights advertises that it will always undercut any competitor's price, the effect of advertising __Best Lights' profits due to its cost and _ Best Lights' profits due to a(n)____in its demand.

Cooperation is possible in a game if both firms know the final period of the game.

-Refer to the payoff matrix above. If Best Lights and Bright Lights both set a High Price, the profit for Best Lights are _ and the profit for Bright Lights are _ than if both firms set a Low Price.