Theory of oligopolistic competition, Microeconomics

Theory of Oligopoly: Oligopoly is that situation where the number of firms in the market is large but not as large as in the case of perfect competition so that it is possible for each firm to affect the market price. The theory of oligopoly concentrates on the strategic interaction between firms. There are several models that look at how firms behave in an oligopolistic market. We will take a brief look at few of them. For greater information on oligopolistic models, avail of the online tutoring and assignment help option provided by Trasntutors.

Cournot Model: Cournot competition, named after Augustine Cournot , is an oligopolistic model where the firms simultaneous decide on the amount of output to produce. Cournot built a model of 2 firms based on his observations of the spring water industry. An important assumption of this model is that each firm is a profit maximizer, given the quantity of output produced by its rivals. Each firm decides the amount of output to produce so as to maximize its profit while believing that its decision will not affect on the decisions of its rivals firms.

1459_reaction function.png

Posted Date: 3/13/2013 1:13:41 AM | Location : United States







Related Discussions:- Theory of oligopolistic competition, Assignment Help, Ask Question on Theory of oligopolistic competition, Get Answer, Expert's Help, Theory of oligopolistic competition Discussions

Write discussion on Theory of oligopolistic competition
Your posts are moderated
Related Questions

Market-Friendly Reforms: One main shortcoming of present development cooperation is that recipients of development cooperation is that recipients of development finance are d

Consider an economy with high innovative potential, but where saving is insufficient to fund innovative investments. Use Garrison's capital-based macroeconomics to explain how more

consumer=m with the help of indifference curve analyis

Monopsony is single buyer of a commodity in the market.  The MRP slopes downward in an imperfectly competitive (resource) market serving an not perfectly competitive product mar

What is the impact of microeconomics on economy?

Discuss the concept of dynamic multiplier

Comparison with Other Countries: The basic purpose of this type of comparison is that: (i) it helps us to know the potentials of growth that can be built up in an economy,

What is utility maximization according to consumer behavior? Consumer Behavior: Utility Maximization A foundational hypothesis onto individual behavior within modern econ