Oligopoly Flashcards
1
Q
Characteristics of Oligopoly
A
- High barriers to entry and exit
- Few sellers in the market
- Non-price competion between firms
- Interdependence between firms in the market
- Price rigidity - price does not change easily
- Collusive - where firms deliberately follow the same pricing structure
- Cartels - groups of firms working together
2
Q
Examples of Oligopoly
A
OPEC - Organisation of Petroleum Exporting Countries
Supermarkets
Car manufacturers
Malt Beverage Industry
Coke/Pepsi/Cadbury Schweppes
Adidas/Nike/Reebok/New Balance/Puma/Converse
Unilever/Procter & Gamble
3
Q
Non Collusive Oligopolies
A
- Highly interdependent but not colluding
4
Q
Price leadership
A
- When one firm would dominate the market and other firms would follow the leader firm
- Tacit collusion
5
Q
Cartels
A
- Formal collusion between firms
- Setting output and price
- Often illegal
- Anti-trust laws (government solution)
6
Q
How would you show welfare loss in a monopoly or an oligopoly as a monopolist?
A
7
Q
Game Theory
A
8
Q
A
