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8 Cards in this Set

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Define Oligopoly. Describe the Oligopoly market structure in terms of the number of producers, barriers to entry, and the type of product.
In in oligopoly there are only 2-6 firms that have market power, the barriers to entry are high and the product is standardized or differentiated.
What are the monopolistic aspects of an Oligopoly? What are the competitive aspects of an oligopoly?
In an oligopoly the firms all have a substantial piece of market power. An are competitive because they all have a very similar product if not identical.
Explain the role of strategic interdependence.
Strategic interdependence in an Oligopoly is a firm choosing the correct times to price match and/or price cut a competitor.
Explain the concentration Ratio. What is the typical concentration ratio for an oligopoly?
Concentration ratio tells the share of output by the largest firms in the industry. In an oligopoly the ratio is normally 60%.
How does an oligopolist increase sales without changing prices? How does that strategy affect market shares of rivals?
In an oligopoly marketing, advertising, and product differentiation a ways to increase sales w/o changing prices, thus increasing market power to one firm.
How does an oligopolist increase sales by changing prices? How does that strategy affect the market shares of rivals?
By price cutting rivals sales over the short-run can be increase and therefore increasing market power to a firm, in the long-run this can lead to price wars ultimately benefiting the consumer.
What is a pure oligopoly?
A pure oligopoly is when few producers dominate the production of on item.
What is a differentiated Oligopoly?
Similar products produced by a few manufacturers within an industry.