Market Structures Oligopoly Flashcards
1
Q
Oligopoly
A
A market structure where a number of interdependent firms compete
2
Q
Barrier to Entry
A
Anything that prevents new firms for entering an industry
3
Q
Economics of Scale
A
EoS exists when a firms long-run average cost falls as it increases output
4
Q
Game Theory
A
Study of decisions of firms in industry where profits of each firm depend on its interaction with other firms
5
Q
Business strategy
A
Actions taken by a firm to achieve a goal
6
Q
Pay off matrix
A
A table that shows the payoffs that each firm earns from combination of strategies by the firms
7
Q
Price Leadership
A
A firm of implicit collusion in which a firm announces a price change and other firms meet the price
8
Q
Cartel
A
A group of firms that collude by agreeing to restrict output to increase prices and profits
