Oligopoly Flashcards
1
Q
What is an oligopoly?
A
A market in which a supply of goods are dominated by large firms.
2
Q
What diagram will be drawn?
A
A kinked curve
3
Q
What is price leadership?
A
When the dominant firms in the market set a price and other firms have to follow it
4
Q
What are price agreements?
A
The pirces are agreed along and supply is restricted to force up prices.
5
Q
What is price wars?
A
When an oligopolist tries to gain advantage through lowering prices- these tend to benefit consumers
6
Q
Advantages of oligopolies?
A
Supernormal profits increase research and development
