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Question 1

oligopoly

Answer 1

n-o more than 7 firms
-collectively around70% market share
-differentiated goods
-price makers
-brand loyalty is high
-high barriers to entry
-interdependence(think about rivals then make decisions) causing price rigidity
EG UK airlines

Question 2

kinked demand curve

Answer 2

oligopoly
above p1 elastic, below inelastic
-move price up to p2 reduces quantity and demand
-firms dont want to change price
-other firms wont change prices due to interdependence
-decreasing price will increase the demand
-decrease price will be bad due to interdependence as other firms will also lower prices, casuing reduced revenue
-HOWEVER PRICE COMP MAY OCCUR EG TESCO VS ALDI
-NON PRICE COMP MAY HAPPEN DUE TO STICKY PRICES
-Tempted to collude as you can act like a monopoly and fix prices