microeconomics chapter 13

  1. discuss how barriers to entry explain the existence of oligopolies
    barriers to entry make it difficult for firms to enter the market which means that fewer firms can control the market.
  2. utilize game theory to analyze the strategies used by oligoplistic firms
    because firms are large relative to the market, they use game theory to predict the actions of other firms because their decisions depend on the actions of other firms
  3. discuss how prisoner's dilemma can be utilized in the study of oligopolies.
    they are going to make the best decision for themselves but they only know what the best decision is when they know what the options for the other firm are.
  4. discuss cartel theory in respect to oligopolies
    cartels increase the profit of the firms in charges as well as those who are not.
  5. cartel
    a group of fimrs that collude to restrict output to increase prices and profits
  6. why cartels are difficult to maintain?
    because the dominant strategy is for the non-owners to not cooperate
  7. use sequential games to analyze business strategies
    used to analyze bargaining between firms and deterring entry
Card Set
microeconomics chapter 13