Microeconomics: Monopoly, Price Discrimination, Game Theory, Oligopoly, Monopolistic Competition

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Microeconomic terms related to monopoly, price discrimination, game theory, oligopoly, and monopolistic competition

Monopoly

A market with only one seller.

Limit pricing

Setting the price lower than the monopoly price to keep competitors out.

Market power

Ability to affect the price.

Price ceiling

Maximum legal price that can be charged for a product or service.

Price discrimination

Charging different prices to different customers.

Reservation price

Maximum price a buyer is willing to pay.

Game theory

The theory that studies decision making in situations in which one player anticipates the reactions of other players to its own actions. Firms are mutually interdependent.

Nash equilibrium

A concept for solving games that states that each player has a set of strategies, and these strategies should be that no player can improve her utility by unilaterally changing her own strategy.

Oligopoly

A market with only a few sellers.

Duopoly

A market with only two sellers.

Sticky prices

Prices that are resistant to change.

Monopolistic competition

A market structure with many producers selling products that are not identical but are close substitutes and with no barriers to entry.

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