Price leadership that takes place when the firms in an industry consider
one firm's price changes to be a good barometer of the market
climate.
An agreement among firms in an industry to take actions that will improve
their mutual well-being; a cooperative effort to gain monopoly
control.
A rule of thumb practiced in some oligopoly industries in which firms
determine their selling price by adding a uniform percentage to
certain elements of average total cost.
Price leadership that takes place when small and relatively weak firms in
an industry accept the price of one powerful firm as the
prevailing price.
An industry made up of two sellers.
Variables that oligopolists take into account in addition to consumer
demand and cost such as the oligopolist's knowledge of previous
rival reactions to price changes, the personality traits of key
managers of rival firms, and the political effects of rivals'
reaction.
An approach to analyzing oligopoly that allows economists to liken the
relation ship between competing oligopolists to a game of cards
or chess.
The recognition by oligopoly firms that actions they might take will
bring reactions by their rivals.
A demand curve made up of two segments, divided at the industry wide
price that has been established, where the segment relating to
higher prices is considerably more elastic than the segment
related to lower prices.
A market characterized by a large number of independent sellers, product
differentiation, and fairly easy entry and exit.
A sellers' market made up of a few firms who recognize their
interdependence and who produce anywhere from rather
standardized to quite differentiated products; it may be fairly
easy or quite difficult to enter.
A practice that allows oligopolists to coordinate their price adjustments
to changes in demand or cost conditions without en gaging in
collusion.
Price leadership that may occur when collusion is
considered undesirable or impossible.
Basically similar products are changed in some way to create some
differences among them in the eyes of consumers.
