Lecture 10: Game Theory/ Oligopoly Managerial Economics BSP 1005 D2 November 2011 Sanjeev Mohta Oligopoly Small number of firms Great deal of interdependence Interdependence leads to strategic behavior Conditions may promote collusion No single model of oligopoly Many models depending on circumstances Conclusions from some Oligopoly models The oligopoly firms will conspire and collaborate to charge the monopoly price and get monopoly profits. The oligopoly firms will compete on price
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Running head: DIFFERENTIATING MARKET STRUCTURES 1 Differentiating Market Structures Gabriel Cathey ECO/365 November 3‚ 2014 Instructor: Paul Andoh DIFFERENTIATING MARKET STRUCTURES 2 Differentiation Market Structure Within the world of marketing‚ there are different advantages which will determine how the product market shall operate. The overall objectives for any company or organization is to supply a product which consumers will constantly demand. As consumer products
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profits rarely go uncontested. A firm making high profits normally attracts competitors. Thus situations of pure monopoly are rare in practice. Instead‚ the usual market structure in industries characterized by internal economies of scale is one of oligopoly‚ in which several firms are each large enough to affect prices‚ but none has an uncontested monopoly. The
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IN THIS CHAPTER YOU WILL 4 THE MARKET FORCES OF S U P P LY A N D D E M A N D Chapter Over view Learn what a competitive market is Examine what determines the demand for a good in a competitive market Examine what determines the supply of a good in a competitive market CONTEXT AND PURPOSE Chapter 4 is the first chapter in a three-chapter sequence that deals with supply and demand and how markets work. Chapter 4 shows how supply and demand for a good determines both the quantity produced
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non-collusive. Obviously‚ in some markets‚ the oligopoly can be part monopoly. Another factor is that some participants of these markets may‚ from time to time‚ receive legal challenges from others. Evaluate the effectiveness of competitive strategies within market structures Within each market structure‚ competition plays a role in the establishment of the market. Perfectly competitive markets lay the foundation for competition in monopolies‚ and oligopolies. To consider perfectly competitiveness
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Management Economics: An Accelerated Approach. M.E. Sharpe . Iran: OPEC May Need Further Output Cuts. (2008). World News Connection. Retrieved November 8‚ 2008‚ from EBSCOhost database. Kaplan‚ J. (1999). Unit 11 – Monopolistic Competition and Oligopoly. Retrieved November 8‚ 2008‚ from http://spot.colorado.edu/~kaplan/econ2010/section11/section11-main.html McConnell‚ C. R.‚ & Brue‚ S.L. (2004). Economics: Principles‚ Problems and Policies (16th Ed). New York: The McGraw-Hill Companies. Report
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monopolistic industry is that oftentimes‚ one entity has the exclusive rights to a natural resource. For example‚ in Saudi Arabia the government has sole control over the oil industry. Monopolistic completion Oligopoly Oligopoly is a market structure in which the number of sellers is small. Oligopoly requires strategic thinking‚ unlike perfect competition‚ monopoly‚ and monopolistic competition. Under perfect competition‚ monopoly‚ and monopolistic competition‚ a seller faces a well-defined demand curve
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the De Beer’s diamond mining. As long as a firm can add more to total revenue by it production‚ the firm will produce it. After the point where marginal revenue equals marginal cost of the marginal unit is greater than the revenue it brings in. Oligopolies are a market with a small number of sellers‚ where the sellers interact strategically with each other. Each player tries to guess which the competitor is trying to do. There are usually a small amount of large firms and they usually control the
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Government can step in if there’s market failureexternalities occur (taxes can be enforced for cigarettes)‚ people who aren’t in the market are affected xvii. Government can step in when there’s market power xviii. Monopoly/oligopoly-government might step in 2) Chapter 2: What does it
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operating systems. The Microsoft Corporation has produced the majority of operating systems for all PC’s (“Microsoft.com”‚ n.d.). Market Structures There are four types of market structures‚ Monopoly‚ Perfect Competition‚ Monopolistic Competition‚ and Oligopoly. They are differentiated by the number of firms in the industry‚ barriers to entry‚ pricing power of the firm‚ output decisions interdependence‚ and whether products are homogeneous (Colander‚ 2013). Monopoly A monopoly is a situation in which
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