What are the key characteristics of an oligopoly?
What will be an ideal response?
An oligopoly is an industry in which there are only a few firms. They can sell differentiated products or identical products. Entry is usually difficult because there can be high advertising costs or cost advantages. A key characteristic of oligopoly is that firms act strategically. Each firm must consider the actions of the other firms in order to determine the best actions for themselves. Because of this, game theory is a useful tool in analyzing the behavior of firms in an oligopoly.
You might also like to view...
Which retail operation would have the highest costs per book sold?
a. a small independent bookstore b. a large retail bookstore chain c. an Internet seller of books d. All would have the same costs.
The Ricardian model can be simplified and made more explanatory by assuming that there is only one resource used in producing goods. What did Ricardo assume the resource was?
a. capital b. technology c. labor d. loanable funds
Which is NOT an example of an intermediate input?
A. A computer chip factory built in Arizona B. Electricity used in a school C. Toilet paper used in an office D. A new chair for a restaurant dining room
A cartel is a group of firms with an implicit, informal agreement to fix prices and output shares in a particular market.
Answer the following statement true (T) or false (F)