Describe the characteristics of an oligopoly
What will be an ideal response?
There are a small number of firms that act interdependently. They are tempted to form a cartel and collude to increase profits. They can compete on price only (if they produce identical products) or compete on price, product quality and marketing (if they produce slightly different products). Natural or legal barriers prevent the entry of new firms.
You might also like to view...
Which of the following is true of a progressive tax system?
A) High income households pay a higher percentage of their income as taxes. B) Low income households pay a higher percentage of their income as taxes. C) All households pay the same amount of taxes irrespective of their income. D) All households pay the same percentage of their income as taxes.
How has organizing a typical firm in a market economy changed over the last century?
A) It has become easier as more and more firms discover how to do it. B) As government intervention has decreased, firms now have more freedom. C) There has been no change one way or the other over the last century. D) It has become more difficult to efficiently organize production.