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13 Cards in this Set
- Front
- Back
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Oligopoly is a market structure in which;
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a small number of firms compete
natural or legal barriers prevent entry of new firms. |
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In oligopoly, there is a small number of firms and each firm is large and can influence...
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the market price, but no one firm can CONTROL the market price
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Oligopoly has barriers to entry, and like monopoly can arise for natural or legal reasons, what is a natural oligopoly?
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IT is a maret in which economies of scale exist but the output of a few firms is required to meet the market demand at the lowest possible cost.
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A legal oligopoly...
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arises when a legal barrier to entry protects the small number of firms in the market
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Firms in oligopoly might produce what kind of product?
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Identical or differentiated
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What is the problem for a firm in oligopoly?
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Its own profit maximizing actions might decrease the profits of its competitors. If all firms do this, then they all end up with lower profits.
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What is a cartel?
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One possible way of avoiding self defeating outcome for firms in oligopoly, it is a group of firms acting together, in collusion, to limit output, raise price, and increase economic profit. A cartel is illegal in the united states
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What is duopoly?
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a market in which there are only two producers.
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The oligopoly market structure lies between...
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perfect competition and monopoly
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What is game theory?
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It is the main tool that economists use to analyze strategic behavior, behavior that recognizes mutual interdependence and takes account of the expected behavior of others.
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What 3 features do all games share?
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Rules
Strategies Payoffs |
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What is the prisoners dilemma?
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A game between two prisoners that shows why its hard to cooperate, even when its beneficial to both players to do so. It captures the essential feature of the duopolists dilemma.
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What is nash equilibrium?
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an equilibrium in which each player takes the best possible action given the action of the other player.
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