Oligopolies

5 flashcards · Economics · by Addaneye

1. Four assumptions for oligopolies

   A few large sellers High barriers to entry and exit Differentiated goods Interdependence

2. Three ways a firm might compete on price

   Price wars Predatory pricing Limit pricing

3. What is limit pricing?

   When an incumbent firms exploits their economies of scale to charge low prices and limit new firms from entering the market

4. Four examples of non-price competition

   Advertising Loyalty cards Branding Quality

5. What is predatory pricing?

   When a firm aggressively cuts its prices below AVC to force out competitors from the market