In This Chapter

  • When a few firms compete
  • The oligopoly: when a market is dominated by a few firms
  • The unique interdependence and behavior of oligopolists
  • Collusion and cartels in the oligopoly
  • When the oligopolist declines to engage in collusion

On the spectrum of market structures, perfect competition, with many producers taking the market price as given, would be on one end, and the monopoly, with one firm dominating supply and making its own price, would be on the other end. Between these two extremes lie two prevalent market structures: oligopoly and monopolistic competition. This chapter describes the oligopoly.

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