Microeconomics Notes 1.5.5: Oligopoly

Oligopoly

________ is a market structure where there are a few large firms that dominate the market.

Competition

________ tends to be non- price and prices tend to be stable, with firms developing strategies that take into account all possible reactions from their rivals when making pricing decisions.

Cartel

________ is a group of firms in an industry that join together to limit competition between member firms, fix prices and maximize joint profits as if the firms were collectively a monopoly.

Game theory

________ is only useful when there are small number of firms, small number of possible options and outcomes can be accurately predicted.

oligopoly dont

Happens when firms in a(n) ________ collude and aware of reactions from the pricing decisions made by other firms for the same product.

Non collusive oligopoly

________ is where firms in an oligopoly dont resort to agreements to fix prices or output.

1.5.5

Oligopoly (HL only) Definitions 1