Barriers to enti ◆ Scale economies ◆ Patents ◆ Technology ◆ Name recognition
Barriers to Entry Scale economies Patents Technology Name recognition
Interdependence e In perfect competition, the producers do not have to consider a rivals response when choosing output and price. In oligopoly the producers must consider the response of competitors when choosing output and price
Interdependence In perfect competition, the producers do not have to consider a rival’s response when choosing output and price. In oligopoly the producers must consider the response of competitors when choosing output and price
Collusive Oligopoly e Oligigolopists can collude to form a cartel in which they work together to raise prices and restrict output. e Collusive oligopolists at large can profit as a monopoly does
Collusive Oligopoly Oligigolopists can collude to form a cartel in which they work together to raise prices and restrict output. Collusive oligopolists at large can profit as a monopoly does
Collusive oligopoly MC Collusive price ATC Average total cost ID MR 0 Q Collusive Quantity
Collusive Oligopoly Q 0 D MC MR Collusive Quantity Collusive B price E ATC Average total cost D C P
Obstacles of Effective Collusion In the vast majority of countries, collusion s legal Members of the cartel are tempted to cheat on the agreement With the development of international trade, many oligopolists face intense competition from foreign firms as well as domestic companies
Obstacles of Effective Collusion In the vast majority of countries, collusion is illegal. Members of the cartel are tempted to cheat on the agreement. With the development of international trade, many oligopolists face intense competition from foreign firms as well as domestic companies