53) Oligopoly Flashcards
What are the key characteristics of an oligopolistic market structure?
1) Concentrated supply
2) Interdependence
3) Barriers to entry
4) Differentiated products
How can firms have good non-price competition?
1) Branding
2) Quality of good/service sold
3) Location of stores
4) After-sales service
5) Interior fitting of stores
6) Range of products/services
7) Bundles of goods
8) Loyalty schemes
9) Free gifts
What is collusion?
Collusion occurs when rival firms agree to work together
What is a cartel?
A formal agreement between firms to limit competition in the market, for example by limiting output in order to raise prices
What is a duopoly?
An industry where there are only two firms
What is game theory?
The analysis of situations in which players are interdependent
What is an oligopoly?
A market structure where there is a small number of firms in the industry and where each firm is interdependent with one another
What is predatory pricing?
A pricing strategy where a firm lowers its prices when a new entrant comes into the market in order to force the competitor out the market
What is price agreement?
A type of formal collusion where two or more firms arrange to fix prices of their products
