53) Oligopoly Flashcards
(9 cards)
What are the key characteristics of an oligopolistic market structure?
1) Concentrated supply
2) Interdependence
3) Barriers to entry
4) Differentiated products
How can firms have good non-price competition?
1) Branding
2) Quality of good/service sold
3) Location of stores
4) After-sales service
5) Interior fitting of stores
6) Range of products/services
7) Bundles of goods
8) Loyalty schemes
9) Free gifts
What is collusion?
Collusion occurs when rival firms agree to work together
What is a cartel?
A formal agreement between firms to limit competition in the market, for example by limiting output in order to raise prices
What is a duopoly?
An industry where there are only two firms
What is game theory?
The analysis of situations in which players (usually firms) are interdependent
What is an oligopoly?
A market structure where there is a small number of firms in the industry and where each firm is interdependent with one another
What is predatory pricing?
A pricing strategy where a firm lowers its prices when a new entrant comes into the market in order to force the competitor out the market
What is price agreement?
A type of formal collusion where two or more firms arrange to fix prices of their products
