Chapter 10: Monopolistic Competition and Oligopoly Flashcards
What is monopolistic competition?
a market structure in which many firms sell products that are similar but not identical
What is an oligopoly?
a market structure in which a few sellers offer similar or identical products
What Is a duopoly?
a two firm oligopoly
What is game theory?
the study of how people or firms behave in strategic situations
What is excess capacity?
the firm could decrease its ATC by increasing production
What is cartel?
a group of firms acting in unison
What is a collusion?
an agreement among firms in a market about quantities to produce and prices to change
What is the tit-for-tat game?
a game theory strategy where each participant mimics the action of their opponent
What is Nash equilibrium?
a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen
What is prisoner’s dilemma?
a paradox in decision analysis where two individuals acting in their own self-interests do not produce the optimal outcome
What is a dominate strategy?
a strategy that gives a player the best outcome regardless of the strategy chosen by their opponent
