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Harry Bindloss




OLIGOPOLY
Oligopoly: A market structure with few firms having large shares of the market. It is only in
this market structure that you are likely to see game theory being applied.

Characteristics:

Market dominated by a few large firms
Therefore high concentration ratio.
Small firms exist but are…

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Harry Bindloss




How the market operates:

1. Price Stability: Prices tend to be stable for long periods of time, with a tendency to
periodic price wars. Cuts in prices to steal market share. If firms keep cutting their prices
the end result is damaging to all firms) huge drops in…

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Harry Bindloss




Increases prices: The market leader will not significantly reduce its market share with a
price increase as it had brand loyal consumers who have inelastic demand. Therefore
other firms do not gain any more customers by not raising prices and lose out on the
extra revenue that could…

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Harry Bindloss




Collusion is deemed to be exploitation of the consumer in order to make supernormal profit.
Therefore it is illegal in the UK and the USA. Firms such as the competition commission
investigate UK markets for such anti-competitive practices. It has the power to prevent
them.



Collusion

Collusion is…

Comments

Natasha

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Thanks your resources are amazing!

davidsalter

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This is an excellent 3 page summary on oligopoly which includes the diagram, collusion and theory. With the same author's revision sheets on monopoly and oligopoly makes a useful set.

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