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Chapter 21: Oligopoly - Coggle Diagram
Chapter 21: Oligopoly
Features of Oligopoly:
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Price competition
Generally avoided, can lead too price wars
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Advantages
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Economies of scale
(Can survive more easily by decreasing average costs. Consumers may also receive lower prices as a result)
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Governement Regulations:
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Control mergers and takeovers (prevents large firms from mergers and takeovers that may result in monopolies/oligopolies in order to keep markets competitive)
Disadvantages:
Cartels/Collusions
Collusion results in raised prices (when all firms raise prices, consumers must pay the new higher price, resulting in exploitation of consumers for profit
Cartels: Where a group of firms/collusions join together and agree on pricing or output levels in the market
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