Oligopoly (AQA A-Level Economics): Flashcards
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Oligopoly
Oligopoly
Market structure dominated by few large firms
Concentration ratio
Concentration ratio
Combined market share of largest firms in industry
Interdependent firms in oligopoly
Interdependent firms in oligopoly
Must consider rivals' reactions but don't cooperate
Non-collusive oligopoly
Non-collusive oligopoly
Firms compete independently without forming agreements
Cartel
Cartel
Formal collusive agreement to fix prices at high level
Joint-profit maximisation
Joint-profit maximisation
Cartel acts together like a single monopoly
Kinked demand curve theory
Kinked demand curve theory
Explains price rigidity in oligopolistic markets
Asymmetric response in oligopoly
Asymmetric response in oligopoly
Rivals match price cuts but not price increases
Price leadership
Price leadership
One firm sets prices, other firms follow
Price war
Price war
Rival firms continuously lower prices to undercut each other