ECON102 Chapter 15: Chapter 15- Oligopoly

• School: University of Waterloo
• Department: Economics
• Course: ECON102
• Professor: Maryann Vaughan

Document Summary

What is oligopoly: oligopoly is a market structure in which, natural or legal barriers prevent the entry of new firms, a small number of firms compete. Barriers to entry: either natural or legal barriers to entry can create oligopoly, figure 15. 1 shows two oligopoly situations, a legal oligopoly might arise even where the demand and costs. In part (a), there is a natural duopoly a market with two firms. In part (b), there is a natural oligopoly market with three firms. leave room for a larger number of firms. Small number of firms: because an oligopoly market has only a few firms, they are. In the prisoners" dilemma game, two prisoners (art and bob) have been caught committing a petty crime. If one of them confesses, he will get a 1-year sentence for cooperating while his accomplice will get a. If both confess to the more serious crime, each receives a 3-year sentence for both crimes.