DP Economics Questionbank
Oligopoly
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Description
[N/A]Directly related questions
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16N.3.HL.TZ0.1f:
Now assume that the market in which Firm A operates has evolved into an oligopoly with only two firms, Firm A and Firm B. Each firm can cut price or maintain the current price. The following payoff matrix shows the profits they face. The profit payoffs for Firm A are in bold.
Using the profit figures in the payoff matrix, explain why strategic interdependence will lead both firms to cut price.
- 21M.3.HL.TZ0.3a: Outline how a concentration ratio might be used to identify an oligopoly.
- 18N.1.HL.TZ0.2a: Explain why prices tend to be relatively rigid in oligopolistic markets.
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18N.1.HL.TZ0.2b:
Discuss whether an oligopolistic firm should collude rather than compete.
Sub sections and their related questions
[N/A]
NoneAssumptions of the Model
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16N.3.HL.TZ0.1f:
Now assume that the market in which Firm A operates has evolved into an oligopoly with only two firms, Firm A and Firm B. Each firm can cut price or maintain the current price. The following payoff matrix shows the profits they face. The profit payoffs for Firm A are in bold.
Using the profit figures in the payoff matrix, explain why strategic interdependence will lead both firms to cut price.
- 21M.3.HL.TZ0.3a: Outline how a concentration ratio might be used to identify an oligopoly.
