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MicroEcon Ch10 - Monopolistic Competition

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any action that firms do to make consumers think their products are different from their competitors'.

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Terms in this set (11)

any action that firms do to make consumers think their products are different from their competitors'.

product differentiation.

a game in which the gains from cooperation are larger than the rewards from pursuing self-interest.

prisoner's dilemma.

when a few large firms have all or most of the sales in an industry.

many firms competing to sell similar but differentiated products.

monopolistic competition.

a perceived demand curve that arises when competing oligopoly firms commit to match price cuts, but not price increases.

kinked demand curve.

firms and organizations that fall between the extremes of monopoly and perfect competition.

imperfectly competitive.

a branch of mathematics that economists use to analyze situations in which players must make decisions and then receive payoffs based on what decisions the other players make.

an oligopoly with only two firms.

a product that consumers perceive as distinctive in some way.

differentiated product.

when firms act together to reduce output and keep prices high.

a group of firms that collude to produce the monopoly output and sell at the monopoly price.