Oligopoly

Question 1

Define collusion.

Answer 1

Collusion is any action undertaken by rival or separate companies to restrict competition between them with a view to increasing TP.

Question 2

Define price rigidity.

Answer 2

Price rigidity is a term used to describe a situation. In which prices do not change, even when there is a change in costs.

Question 3

Define constant prices.

Answer 3

Price constancy means a firm maintains the same selling price, even if there is a small change in costs.

Question 4

Define price competition.

Answer 4

Price competition is where firms compete by changing prices.

Question 5

Define non-price competition.

Answer 5

Non-price competition is any action undertaken to increase sales at the expense of other firms, other than lowering prices.

Question 6

Define persuasive advertising.

Answer 6

Persuasive advertising is used to persuade people that they can’t live without a product.

Question 7

Define competitive advertising.

Answer 7

Competitive asserting is used to convince customers that one product is better than another.

Question 8

Define informative advertising.

Answer 8

Informative advertising gives factual information about a product.

Question 9

Define homogeneous oligopoly.

Answer 9

Homogeneous oligopoly is where a few firms sell identical products and firms are extremely interdependent.

Question 10

Define duopoly.

Answer 10

Duopoly is a market structure where there are only 2 suppliers of a good.

Question 11

Define differentiated oligopoly.

Answer 11

Differentiated oligopoly is where the few dominant firms sell similar products that aren’t exactly identical, but are very close substitutes.