Chapter 15- Monopolistic Competition and Oligopoly

Question 1

Oligopoly

Answer 1

A market with only a few firms, which sell a similar good or service

Question 2

Monopolistic Competition

Answer 2

A market with many firms that sell goods and services that are similar, but slightly different

Question 3

Product differentiation

Answer 3

The creation of products that are similar to competitors’ products but more attractive in some ways

Question 4

Collusion

Answer 4

The acts of working together to make decisions about price and quantity

Question 5

Dominant strategy

Answer 5

A strategy that is the best one for a player to follow no matter what strategy other players

Question 6

Nash equilibrium

Answer 6

An equilibrium reached all players choose the best strategy they can, given the choices of all other players. It’s a situation wherein, given the consequences, the player has no regrets about his or her decision

Question 7

Cartel

Answer 7

A number of firms that collude to make collective production decisions about quantities or prices

Question 8

Duopoly

Answer 8

two firms competing in a market