Oligopoly Teaching/Revision Pack: 20 Exercises

3.4.4 Oligopoly Oligopoly Teaching/Revision Pack: 20 Exercises

20 Exercises and Fully Worked Solutions Covering:

a Price stability. The actions of one firm will impact on other firms in the industry as they are interdependent.
b Students should be able to calculate concentration ratios and be able to identify the likely market structure and the significance.
c Oligopoly firms have an incentive to work together through collusive
agreements.
d Considering why firms might collude tacitly or overtly, or engage
in non-price competition.
e Game theory can be used to predict how firms might behave. It is used to
explain why firms may collude and why collusive agreements may break down…
f Exploring types of price competition.Other types of price competition should be considered; for example, predatory pricing and limit pricing.
g Non-price competition can take the form of advertising, issuing of loyalty cards, branding, packaging and other measures to reduce the closeness of substitutes.