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21 Cards in this Set
- Front
- Back
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the number and relative size of firms in an industry
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market structure
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a market in which a few firms produce all or most of the market supply of a particular good or service
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oligopoly
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an imperfectly competitive industry subject to potential entry if prices or profits increase
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contestable market
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the proportion of total industry output produced by the largest firms (usually the four largest)
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concentration ratio
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one of the dominant firms in an oligopoly
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oligopolist
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the percentage of total market output produced by a single firm
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market share
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features that make one product appear different from competing products in the same market
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product differentiation
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oligopolists avoid-----and pursue what?
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price competions, non price competition (advertising, production differntiation)
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each oligopolist has to consider the potential responses of rivals when formulating price or output strategies
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game theory
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the study of decision making in situation where strategic interaction between rivals occurs
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game theory
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explicit agreements among producers regarding the prices at which a good is to be sold
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price fixing
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an oligopolistic pricing pattern that allows one firm to establish the market price for all firms in the industry
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price leader ship
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a group of firms with an explicit formal agreement to fix prices and output shares in a particular market
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cartel
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temporary price reductions designed to alter market shares or drive out competition
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predatory pricing
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an imperfection in the market mechanism that prevents optimal outcomes
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market failure
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measure of industry concentration that accounts for number of firms and size of each
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hhi
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oligopoly have what kind of competition?
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imperfect competition
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what is one form of barriers to entry?
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patents
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how many real world firms are classified as oligopoly
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15 percent
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What indicates an oligopoly in an industry?
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Concentration Ratio greater than or equal to 70 percent
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one curve is predicated on the assumption that rival oligopolists don't respond to price increases the other curve is predicated on the assumption that rivals do respond to price cuts
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kink in demand curve
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