5 Questions
What type of products are associated with a homogeneous oligopoly?
Standardized products
What supports nonprice competition in a differentiated oligopoly?
Heavy advertising
What does 'Big Three' or 'Big Six' refer to in the context of oligopoly?
An oligopolistic industry dominated by a few large producers
What best describes the control over prices in an oligopoly?
Considerable control by the oligopolists
What term describes a market dominated by a few large producers of a homogeneous or differentiated product?
Oligopoly
Study Notes
Oligopoly Characteristics
- Homogeneous oligopoly is associated with products that are identical, such as steel, aluminum, and gasoline.
- Nonprice competition in a differentiated oligopoly is supported by advertising, product differentiation, and research and development.
- The term 'Big Three' or 'Big Six' refers to a small number of dominant firms in a specific industry, such as the automotive or oil industries.
- In an oligopoly, the control over prices is characterized by interdependence, where firms consider the reactions of their competitors when making pricing decisions.
- Oligopoly refers to a market dominated by a few large producers of a homogeneous or differentiated product, leading to a high level of market concentration and potential collusion.
Test your understanding of oligopoly with this quiz. Explore the characteristics of oligopolistic markets, including the dominance of a few large producers and their control over prices. Get familiar with terms such as "Big Three" and "Big Four" used to describe oligopolistic industries.
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