Oligopoly

Question 1

Oligopoly

Answer 1

only a few firms in the market

Question 2

Capacity competition

Answer 2

the firms’ supply affects the market price so they must control their supply accordingly

Question 3

Each firm can

Answer 3

have a significant impact on market price

Question 4

types of oligopolistic competitions

Answer 4

price competition
capacity competition
bertrand competition

Question 5

price competition

Answer 5

firms can compete on price to attract more customers

Question 6

capacity competition

Answer 6

firm’s supply affects the market price so they must control their supply accordingly
-> Cournot competition

Question 7

Bertrand competition

Answer 7

firms sell identical products and choose a price to attract customers

Question 8

In Bertrand competition: Nash equilibrium

Answer 8

each agent is giving their most profitable response to other agents
each firm sets their price equal to their cost
Nash equilibrium is point of intersection in graph

Question 9

Hotteling competition mean

Answer 9

two firms sell different products, customers might prefer one product BUT will buy the other cause cheap enough

Question 10

Hotteling compet (pricing)

Answer 10

firms choose a price to maximise profit
- lower price = more customer
- high price= more revenue per customer