Lesson 35 pg. 97 - 99

Question 1

Define oligopoly

Answer 1

oligopoly - a market that occurs when an industry is dominated by only a few firms

Question 2

Describe oligopoly

Answer 2

> fourth market model
in oligopoly, choices made by one firm directly affect choices make by all other firms in an industry
oligopoly’s following characteristics: only a few firms in entire industry, firms may sell products that are either differentiated or virtually the same, potential firms are discouraged by existence of significant entry barriers
When leading four firms supply at least 40 percent of goods sold in market, industry is normally said to be an oligopoly
examples: American automobile market and aircraft transportation