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8 Cards in this Set

  • Front
  • Back
strategic behavior
the behavior that occurs when what is best for A depends on what B does, and what is best for B depends on what A does
game theory
a description of oligopolistic behavior as a series of strategic moves and ountermoves
dominant strategy
a strategy that produces better results n matter what strategy the opposing firm follows
an organization of independent firms whose purpose is to control and limit production and maintain or increase prices and profits
A cartel is likely to remain in force when:
1. there are few firms in the industry
2. there are significant barriers to entry
3. An identical product is produced
4. There are few opportunities to keep actions secret
5. There are no legal barriers to sharing agreements
facilitating practices
actions by oligopolistic firms that can contribute to cooperation and collusion even though the firms do not formally agree to cooperate
cost-plus/markup pricing
a pricing policy whereby a firm computes its average costs of producing a product and then sets the price at some percentage above this cost
most-favored customer (MFC)
a customer who receives a guarantee of the lowest price and all product features for a certain period of time