3.4.4 - Oligopoly

    Cards (12)

    • What is the definition of oligopoly?
      A market structure with few interdependent firms
    • How do firms in an oligopoly influence market prices?
      They can influence prices due to interdependence
    • What are the barriers to entry in an oligopoly?
      High barriers to entry
    • What is the market share of the top firms in an oligopoly?
      At least 60% market share
    • What are the key features of an oligopoly?
      • Few dominant firms
      • High entry barriers
      • Potential for collusion
      • Reliance on non-price competition
    • What is non-price competition in oligopoly?
      Competition through advertising and product differentiation
    • How may firms in an oligopoly collude?
      Formally through cartels or informally through tacit collusion
    • What does game theory analyze in the context of oligopoly?
      Strategic interactions between firms
    • What does the Prisoner's Dilemma illustrate in oligopoly?
      Why firms may avoid cooperation despite benefits
    • What type of demand curve do oligopoly firms face?
      A kinked demand curve
    • How is the kinked demand curve characterized for price changes?
      Elastic for price increases, inelastic for decreases
    • What is the summary of oligopoly characteristics?
      • Few interdependent firms
      • High entry barriers
      • Potential for collusion
      • Reliance on non-price competition
      • Analyzed using game theory and kinked demand curves