Oligopoly

Question 1

Oligopoly

Answer 1

small group of firms can influence each other

Question 2

Cournot
Stackelberg
Bertrand

Answer 2

Cournot - simultaneously choose quantities
Stackelberg - firms sequentially choose quantities: leader and follower
Bertrand - firms simultaneously choose prices

Question 3

Cournot

Answer 3

explains how firms behave if they simultaneously choose how much they produce. We look at 2 firms selling identical products with identical costs: Duopoly

Question 4

Cournot

Answer 4

Question 5

Answer 5

Question 6

Answer 6

Question 7

Answer 7

Question 8

Stackelberg sequential choice

Answer 8

2 firms, one firm can choose its quantity before the other firm e.g.one enters market first. Whoever chooses quantity first is stackelberg leader. Based on leaders choice the other firm chooses its quantity - BR. Leader predicts what the follow will do and acts. Chooses its output to manipulate the follower benefiting at the followers expense. The problem can be solved by backward induction:

Question 9

Answer 9

Question 10

Question 10

Question 11

Answer 11

Question 12

Answer 12

Question 13

Answer 13