Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
18 Cards in this Set
- Front
- Back
exists when a small number of firms sell a differentiated product in a market with high barriers to entry. |
oligopoly |
|
an agreement among rival firms that specifies the price each firm charges and the quantity it produces. |
collusion |
|
a group of two or more firms that act in unison |
cartel |
|
attempt to prevent oligopolies from behaving like monopolies. |
antitrust laws |
|
a market situation where the actions of one firm have an impact on the price and output of its competitors. |
mutual interdependence |
|
occurs when an economic decision-maker has nothing to gain by changing strategy unless it can collude. |
Nash equlibrium |
|
occurs when the price of a good or service is affected by the entrance of a rival firm in the market. |
price effect |
|
occurs when the entrance of a rival firm in the market affects the amount produced. |
output effect |
|
branch of mathematics that economists use to analyze the strategic behavior of decision-makers. |
game theory |
|
occurs when decision-makers face incentives that make it difficult to achieve mutually beneficial outcomes. |
prisoner's dilemma |
|
exists when a player will always prefer one strategy, regardless of what his opponent chooses. |
dominent strategy |
|
a long-run strategy that promotes cooperation among participants by mimicking the opponents most recent decision with repayment in kind. |
tit-for-tat |
|
the first federal law limiting cartels and monopolies. |
sherman antitrust act |
|
targets corporate behaviors that reduce competition. |
clayton act |
|
occurs when firms deliberately sat their prices below average variable costs with the intent of driving rivals from the market. |
predatory pricing |
|
occurs when the number of customers who purchase or use a good influences the quantity demanded. |
network externality |
|
arises when a buyer's preference for a product increases as the number of people buying it increases. |
bandwagon effect |
|
costs incurred when a consumer changes from one supplier to another. |
switching costs |