Principles of Economics 3e: Monopolistic Competition and Oligopoly

These flashcards cover key concepts related to monopolistic competition and oligopoly from the Principles of Economics lecture notes.

Monopolistic Competition

A market structure characterized by many firms offering differentiated products, where each has some control over its market price.

Oligopoly

A market structure dominated by a small number of large firms, which have a significant influence over prices and output.

Product Differentiation

The process of distinguishing a product from similar offerings to make it more attractive to a specific target market.

Game Theory

A mathematical approach to decision-making that involves multiple players, where the outcome depends on the actions of all participants.

Prisoner’s Dilemma

A scenario in game theory where two individuals might not cooperate, even if it appears that cooperation is in their best interest.

Nash Equilibrium

A situation in a game where no player can gain by changing strategies if the other players keep their strategies unchanged.

Duopoly

A specific type of oligopoly where only two firms dominate the market.

Kinked Demand Curve

A model used to describe price rigidity in oligopoly markets, where demand curves have different slopes above and below a certain price.

Marginal Revenue

The additional revenue that is gained from selling one more unit of a good or service.

Entry and Exit in Markets

The processes that occur when firms enter a market to capitalize on profit opportunities or exit to avoid losses, influencing overall market dynamics.