64: Intro To Oligopoly Flashcards
1
Q
interdependence
A
a relationship in which the profit of each firm depends on the actions of other firms in the market
2
Q
collusion
A
when sellers cooperate to raise their joint profits
3
Q
cartel
A
a group of producers that agree to restrict output in order to increase prices and their for their joint profits
4
Q
price effect for oligopoly
A
each individual oligopoly faces a smaller price effect than a monopolists because each producer only cares about the effect that falls on their production
5
Q
non-cooperative behavior
A
when firms ignore the effects of their actions on each other’s profits
6
Q
Bertrand model
A
price slashing until MR = MC = price
7
Q
cournot model
A
each firm fixes its own quantity produced, assuming the quantity produced by competitors is fixed
