Revision-Oligopoly: Game Theory and Strategic Behavior

What is a key characteristic of an oligopoly?

• Few sellers with significant market power

• Many sellers with no market power

• Single seller with total market control

• No barriers to entry

Which tool is crucial for analyzing strategic interactions in an oligopoly?

• Game Theory

• Supply and Demand Analysis

• Cost-Benefit Analysis

• SWOT Analysis

What is a Nash Equilibrium in the context of an oligopoly?

• A situation where no firm can improve its payoff by unilaterally changing its strategy

• A situation where all firms agree to set prices at a certain level

• A situation where firms engage in aggressive price cutting

• A situation where firms differentiate their products

What is one of the main types of oligopolies?

• Colluding oligopolies

• Perfect competition

• Monopolistic competition

• Monopoly

What is a common strategy used by firms in an oligopoly to influence the market?

• Price competition

• Ignoring competitors

• Reducing product quality

• Decreasing advertising efforts

Explain one impact on stakeholders of having oligopolies in a market