ECO100Y1 Chapter Notes - Chapter 10: Blackberry Limited, Monopoly Price, Oligopoly
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Topic 10 oligopoly (week ten nov 16th - nov 24th) Outline: oligopoly key features, monopoly profits for oligopolists: cartel, firm cheats; carte breaks down, prisoner"s dilemma pay-off matrix, application ban on tv advertising. Rim plans to introduce a new kind of tablet called playbook. - what features should it have (i. e. size, color); These answers depend upon what rim believes apple inc. will do with its ipad, in response. Its strategic decisions reflect anticipated response of its rivals. (cid:122) oligopoly key features: no single theory about oligopoly, economic profits can range from nil to monopoly level, mutual interdependence among firms is central to analysis: - oligopolistic firms within an industry are aware that the behavior of one firm will influence others. (cid:122) examples monopoly vs oligopolists. - monopolist maximizes profit. (* we know that atp=60,q=30 mr=0 because at that point the total revenue stops increasing. ) Mr: duopolist - (for simplicity assume there are only two firms in the industry);
