Imperfect Competition in Microeconomics

These flashcards cover key vocabulary and concepts related to imperfect competition in microeconomics.

Imperfect Competition

Market structures that have characteristics between perfect competition and monopoly.

Nash Equilibrium

An equilibrium in which each firm is doing its best, conditional on the actions taken by other firms.

Collusion

Economic behavior in which firms in an oligopoly coordinate their production and pricing decisions to act as a monopoly.

Cartel

An agreement between firms in an oligopoly to coordinate their pricing and production to maximize joint profits.

Bertrand Competition

An oligopoly model where firms compete by choosing the price of their products.

Cournot Competition

An oligopoly model where firms compete by choosing the quantity of their products.

Stackelberg Competition

An oligopoly model in which firms make production decisions sequentially rather than simultaneously.

Monopolistic Competition

A market structure characterized by many firms selling a differentiated product with no barriers to entry.

Residual Demand Curve

The demand remaining for a firm’s output given the production quantities of competitor firms.

Reaction Curves

Functions that relate a firm’s best response to its competitor’s possible actions.