GMS 402 Chapter Notes - Chapter 9: Oligopoly, Marginal Revenue, Best Response
8 Nov 2016
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Oligopoly: a market structure in which there are only a few rms, each of which is relative to the total industry. The number for an oligopoly is usually somewhere between 2 and a 10, and the products the rm offers may be either identical or differentiated. An oligopoly composed of only two markets is called a duopoly. In determining what price to charge, the manager must consider the impact of his or her decisions on other rms in the industry. Demand curve d1 based on the assumption that rival will match nay price change, while. D2 is based on the assumption that they will not match a price change. Demand is more inelastic when rivals match price change. Sweezy oligopoly is based on a very speci c assumption regarding how other rms will respond to price increases and price cuts. An industry is characterized as a sweezy oligopoly if:
