1. Chapter 16: Oligopoly

2. Imperfect Market
Imperfect Competition is a market that is neither monopoly, or perfect competition
In Imperfect Competition, there are industries that have competitors, but not as much competition.

3. Imperfect Market There are two main types of Imperfect Competition
Oligopoly
Very limited sellers, less competition, selling identical product with each other
Monopolistic Competition
There are Many firms, and has all the characteristics of a competitive market, but selling product similar but not identical

4. Oligopoly
In oligopoly, there are only few sellers in the market, creating tension between sellers due to Rationalization
All sellers in the market are independent
Sellers are better off if they work together in a cartel, producing less and charging higher price.

5. Duopoly Duopoly is the type of oligopoly but with only two firms.
In a Duopoly, each firms takes heed of each other’s production, and price to trust each other.

6. Duopoly
In Perfectly Competitive market, it is a horizontal demand curve, meaning Price is equal to Marginal Cost which is Zero, and Quantity being any number.
While in Monopoly, they can maximize profit

7. Oligopoly & Perfect Competition
As I have mentioned, in order for imperfect competition to maximize they can either do one of two things.
Collusion: agreement in the market, to sell their similar products in a certain price
Cartel: group of oligopolist who comes together to act as if they are in monopoly
Yet the anti trust laws exists to prevent this kind of activity

8. Nash Equilibrium
Nash Equilibrium usually exists in oligopoly, when people in economical means will pick a certain strategy which is best for them.

9. Quantity input control
Increasing the number of Input in the market will change various things in the market.
Because P is greater than MC, it would profit the firm to selling more at the current price
But when production rises, it will cause huge supply, causing the price to drop

10. Market Size
As the market grows, oligopoly will start looking much like the competitive market
As the price comes to equal the MC, will approach the socially efficient level.

11. Oligopoly Graph