econ ch 15 outline

econ ch 15 outline - Kristin Chen ECON CH 15Oligopoly 1....

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Kristin Chen ECON CH 15–Oligopoly 1. Prevalence of Oligopoly a. Oligopoly = industry with only a small number of producers b. Oligopolist = producer in an oligopoly c. Imperfect competition = when no one firm has a monopoly but producers nonetheless realize that they can affect market prices in an industry i. d. Most importance source of oligopoly = economies of scale 2. Understanding Oligopoly a. Duopoly = oligopoly consisting of only 2 firms b. Duopolist = each firm in a duopoly c. Collusion = when sellers cooperate to raise each others’ profits d. Cartel = strongest form of collusion, arrangements that determines how much each firm is allowed to produce e. Noncooperative behavior = when firms ignore the effects of their actions on each other’s profits 3. Games Oliopolists Play a. Interdependence = when decisions of 2+ firms significantly affect each other’s profits b. Game theory = study of behavior in situations of interdependence
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This note was uploaded on 02/13/2008 for the course ECON 1110 taught by Professor Wissink during the Fall '06 term at Cornell.

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econ ch 15 outline - Kristin Chen ECON CH 15Oligopoly 1....

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