Chapter 17 - Oligopoly Flashcards
1
Q
Oligopoly
A
- a market structure in which only a few sellers offer similar or identical products
2
Q
Duopoly
A
- an oligopoly with only two firms
3
Q
Collusion
A
- a possible outcome in oligopoly
- an agreement among firms in a market about quantities to produce or prices to charge
4
Q
Cartel
A
- a group of firms acting in unison
- these are difficult to form as often times firms will renege on agreements to earn more profit (even though they stand to earn more profit together)
5
Q
Nash Equilibrium
A
- a situation in which economic participants interacting with one another each chose their best strategy given the strategies all others have chosen
6
Q
Increasing Output in Oligopoly
A
- Has two outcomes: Output & Price Effects
- Output Effect: selling more output raises profits
- Price Effect: selling more output reduces P and profit
if output effect > price effect = increase production
if output effect
7
Q
Public Policy & Oligopoly
A
- promote competition
- prevent cooperation
