{"id":1235,"date":"2015-05-11T23:36:21","date_gmt":"2015-05-11T23:36:21","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterymicro1xngcxmaster\/?post_type=chapter&#038;p=1235"},"modified":"2015-07-11T14:36:24","modified_gmt":"2015-07-11T14:36:24","slug":"putting-it-together-9","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/chapter\/putting-it-together-9\/","title":{"raw":"Putting It Together: Oligopoly","rendered":"Putting It Together: Oligopoly"},"content":{"raw":"<h2>Summary<\/h2>\r\nThe goal of this module was analyze a firm\u2019s profit maximizing strategies under conditions of oligopoly. \u00a0You learned how to:\r\n<ul>\r\n\t<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Define characteristics of oligopolies<\/li>\r\n\t<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Explain why collusion can occur in oligopolistic industries<\/li>\r\n\t<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Explain the role of game theory in understanding the behavior of oligopolies<\/li>\r\n\t<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Explain why oligopolies are inefficient.<\/li>\r\n<\/ul>\r\nhttps:\/\/www.youtube.com\/watch?v=54bQEZfdVTg&amp;feature=youtu.be\r\n<h2>Examples<\/h2>\r\nWhile oligopoly is defined as an industry consisting of, or dominated by a small number of firms, the key characteristic is interdependence among firms. \u00a0Oligopolies can be characterized by collusion, where firms act jointly like a monopolist to share industry profits, or by competition, where firms compete aggressively for individual profits, or something in between. \u00a0The computer operating system, dominated by Microsoft, fits the former profile with persistent high economic profits. \u00a0The airline industry (e.g. United) fits the latter profile, leading to prices barely above costs and low profits.\r\n\r\nOligopolies are inefficient for the same reasons that monopolies are\u2014in order to reap economic profits, they produce too little output so they create deadweight losses to society. \u00a0The more like a monopoly a given oligopoly is, the higher their profits and the greater the deadweight loss. \u00a0This is why strong oligopolies usually generate antitrust action by the government.\r\n\r\n&nbsp;","rendered":"<h2>Summary<\/h2>\n<p>The goal of this module was analyze a firm\u2019s profit maximizing strategies under conditions of oligopoly. \u00a0You learned how to:<\/p>\n<ul>\n<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Define characteristics of oligopolies<\/li>\n<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Explain why collusion can occur in oligopolistic industries<\/li>\n<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Explain the role of game theory in understanding the behavior of oligopolies<\/li>\n<li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Explain why oligopolies are inefficient.<\/li>\n<\/ul>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Credit Card Competition\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/54bQEZfdVTg?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>Examples<\/h2>\n<p>While oligopoly is defined as an industry consisting of, or dominated by a small number of firms, the key characteristic is interdependence among firms. \u00a0Oligopolies can be characterized by collusion, where firms act jointly like a monopolist to share industry profits, or by competition, where firms compete aggressively for individual profits, or something in between. \u00a0The computer operating system, dominated by Microsoft, fits the former profile with persistent high economic profits. \u00a0The airline industry (e.g. United) fits the latter profile, leading to prices barely above costs and low profits.<\/p>\n<p>Oligopolies are inefficient for the same reasons that monopolies are\u2014in order to reap economic profits, they produce too little output so they create deadweight losses to society. \u00a0The more like a monopoly a given oligopoly is, the higher their profits and the greater the deadweight loss. \u00a0This is why strong oligopolies usually generate antitrust action by the government.<\/p>\n<p>&nbsp;<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1235\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li><strong>Authored by<\/strong>: Steven Greenlaw and Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Video: Credit Card Competition. <strong>Provided by<\/strong>: BBC . <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=54bQEZfdVTg\">https:\/\/www.youtube.com\/watch?v=54bQEZfdVTg<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/\">CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives <\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":969,"menu_order":15,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"\",\"author\":\"Steven Greenlaw and Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Video: Credit Card Competition\",\"author\":\"\",\"organization\":\"BBC \",\"url\":\"https:\/\/www.youtube.com\/watch?v=54bQEZfdVTg\",\"project\":\"\",\"license\":\"cc-by-nc-nd\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"ceadba71-cb33-473a-9f59-aa506e66e809","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1235","chapter","type-chapter","status-publish","hentry"],"part":31,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/1235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/wp\/v2\/users\/969"}],"version-history":[{"count":7,"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/1235\/revisions"}],"predecessor-version":[{"id":3324,"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/1235\/revisions\/3324"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/parts\/31"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/chapters\/1235\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/wp\/v2\/media?parent=1235"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/pressbooks\/v2\/chapter-type?post=1235"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/wp\/v2\/contributor?post=1235"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/atd-herkimer-microeconomics\/wp-json\/wp\/v2\/license?post=1235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}