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Oligopoly - Coggle Diagram

- - - - better products and choices due to non-price competition. But if firms collude then this may not happen. Excessive advertising can lead to environmental damages
      - Cooperation between oligopolist which can lead to better products and cheaper prices, increase consumer surplus. But Collusion
    - - Supernormal profit is earn. But this depends on whether a price war is going on as this occurs in the real world
  - - - Possibility of collusion so firms act as monopolist. Allocative and productive inefficiency - but dynamically efficient so consumers benefit from better products in the long run
      - Barriers to entry which leads to other firms not being able to compete in the market. Existing firms may be uncompetitive and products produce are poor quality.
      - High concentration ratio reduces consumer choices. But non-price competition may make the limited choices high quality.
      - Aggressive advertising can mislead consumer into thinking that the products are good but actually they are bad. Distort the allocation of the price mechanism.
    - - price war can harm supernomral profit for firms - but collusion can solve the issue. Or firms are uncertain and interdependence hence they do not engage in price competition and remain at equilibrium.