- S1 is the supply curve before a tax and S2 is the supply curve after a $3 per unit tax has been applied to this market. how is the burden of the tax shared between buyers and sellers? buyers bear (Memorize answer)
- ____ rivals may collectively act like a ___________ (tacit collusion). By restricting __________, oligopolists can earn price premia and economic profits.
- •Actual performance depends on discipline among rivals to avoid ______________
- Cournot Equilibrium•Situation where each firm produces the output that ___________ its profits, given the _______ of rival firms
- Ease of entry encourages __________________, pushing economic profits to ____________
- In a monopoly, ______ firm supplies the market with ____________________ risk of entry
- Summary of Oligopoly•To determine how best to play the game, a firm must first determine what kind of __________ it is in
- Summary of Oligopoly•When quantity is the strategic variable: (what type of oligopoly is it?)
- Summary of Oligopoly•The tools of _____________ are very useful to oligopolists since their profits are ______________
- Summary and Takeaways - Sequential Games•Committing to be ________ can sometimes create ______________
- Summary and Takeaways - Sequential GamesLook _________________, reason __________________ to solve sequential games
- Types of OligopolyHomogeneous/Quantity
- Summary and Takeaways - Sequential Games•Strategic commitment by an incumbent is one way to create a ________ threat of retaliation toward an ____________—may deter entry
- Monopoly Profit Maximization Produce where _____= ________ and charge the price on the demand curve that corresponds to that _____________
- Under monopoly conditions:Firm has ____ control over price
- Monopolists earn rents by _____________ which sets price above economic costs
- Game Theory is a body of literature that seeks to explain how non-cooperating players _______
- Summary of Oligopoly••When Price is the strategic variable: (what type of oligopoly is it?)
- Sometimes differentiated positions in markets becomes so entrenched or significant that it creates intra-industry barriers to ________________ and clusters of firms called ____________________
- Fundamentals (Steps) of Game Theory1. Identify the ___________2. Identify their _____________3. Identify their _______________ from their actions4. Determine the players' ________________5. Determine the __________________ outcomes