Oligopoly

Which of the following is NOT a characteristic of an oligopolistic market?

• Firms are interdependent (their actions affect one another)

• Supply is dominated by just a few firms

• There are high barriers to entry

• Firms are price takers

Which of the following are barriers to entry for companies wanting to enter an oligopolistic market?

• Economies of scale

• Brand loyalty

• Sunk costs

• Patents and copyright

What is collusion in oligopolistic markets?

• When firms work together to reduce competition and maximise their own benefits/profits

• When there is lots of price and non-price competition between firms

• When there are high sunk costs for firms

• When firms use copyright to stop other firms copying their ideas

Collusion is illegal in most countries:

• True

• False

Which of the following is the best definition of formal collusion?

• When firms meet to agree to fix prices or limit competition

• When firms closely monitor their rivals and copy their actions ('a nod and a wink')

Which of the following is the best definition of tacit collusion?

• When firms meet to agree to fix prices or limit competition

• When firms closely monitor their rivals and copy their actions ('a nod and a wink')

Which of the following is the best definition of a cartel?

• When a group of firms, businesses or countries collude to fix prices and limit competition

• When firms compete using non-price competition

• When firms compete using price competition

• When firms try to increase sunk costs

Which of the following must be true for a cartel to function?

• An agreement must be reached between all members

• Cheating by one member must be prevented

• Competition must be restricted

• There must be lots of price and non-price competition

Which of the following is a famous oil cartel?

• ABEC

• OBEC

• APEC

• OPEC

Which of the following industries would be described as oligopolies in the UK?

• Groceries

• Internet providers

• Streaming services

• Hairdressers