66: Oligopoly In Practice Flashcards
1
Q
antitrust policy
A
efforts by government to prevent oligopolistic industries from becoming or behaving like monopolies
2
Q
why are prices lower in oligopoly than Monopoly, but higher than perfect competition? (4)
A
1) large number of firms – less incentive to cooperate
2) complex products and pricing schemes
3) differences in interests and concepts of fairness
4) bargaining power of buyers
3
Q
price wars
A
when tacit collision breaks down and aggressive price competition causes prices to collapse
4
Q
price leadership
A
when one firm sets it’s price first and then other firms follow
5
Q
non-price competition
A
using ads and other means to increase sales while maintaining tacit collusion on prices
