ECON Monopolistic Competition

collusion

a situation in which individuals, firms, or any group of actors coordinate their actions to achieve a desired outcome.

mutual interdependence

a situation in which the strategy followed by one producer will likely affect the profits and behavior of another producer

payoff matrix

a table showing the potential outcomes arising from the choices made by decision makers

makers

the producers in an oligopoly are price ______

product differentiation

the strategy of distinguishing one firm's product from the competing products of other firms

game theory

the study of the strategic behavior of decision makers

oligopoly

a market structure characterized by a few larger producers, of either standardized or differentiated products, operating in industries with extensive entry barriers.

monopolistic competition

a market structure characterized by a relatively large number of sellers producing a differentiated product, for which they have some control over the price they charge, in a market with relatively easy market entry and exit

dominant strategy

a situation in which a particular strategy yields the highest payoff regardless of the other player's strategy

Nash equilibrium

an outcome in which unless the players can collude, neither player has incentive to change his or her strategy