Oligopoly (Micro) Flashcards
What are the conditions for an oligopoly, how do they compete and where are prices found (11 cards)
What is an oligopoly?
A market dominated by a small number of powerful firms.
What is significant about oligopolies?
Firms are interdependent, so they take into account how other firms behave.
What is a concentration ratio?
Measure of how concentrated a market is, total share held by the largest firms in a market.
What is a cartel?
A collusive agreement among a number of oligopoly firms to fix prices or output.
What is tacit collusion?
A collusive relationship without any formal agreement.
What is overt collusion?
A collusive relationship with a formal agreement.
An example of a cartel?
OPEC (Organisation for petroleum exporting countries)
Issues with cartels?
Effectively monopoly, allows inefficient firms to survive,
What does the kinked demand curve show?
Interdependence between firms in an oligopoly
What kind of competition will oligopoly markets involve?
Non price competition
Examples of non price competition?
Product differentiation
Customer service
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