(See related pages)
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| cartel | A formal agreement among firms in an industry to set the price of a product and establish the outputs of the individual firms or to divide the market among them. (See page(s) p. 244) |
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| collusion | A situation in which firms act together and in agreement to fix prices, divide a market, or otherwise restrict competition. (See page(s) p. 241) |
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| concentration ratio | The percentage of the total sales of an industry produced and sold by an industry's largest firms. (See page(s) p. 237) |
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| differentiated oligopoly | An oligopoly in which the firms produce a differentiated product. (See page(s) p. 235) |
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| excess capacity | Plant or equipment that is underused because the firm is producing less than the minimum-ATC output. (See page(s) p. 233) |
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| game theory model | A means of analyzing the pricing behaviour of oligopolists using the theory of strategy associated with games such as chess and bridge. (See page(s) p. 238) |
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| Herfindahl index | The sum of the squared percentage market share of all firms in the industry. (See page(s) p. 238) |
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| homogeneous oligopoly | An oligopoly in which the firms produce a standardized product. (See page(s) p. 235) |
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| import competition | The competition domestic firms encounter from the products and services of foreign producers. (See page(s) p. 237) |
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| interindustry competition | The competition between the products of one industry and the products of another industry. (See page(s) p. 237) |
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| monopolistic competition | A market structure in which a relatively large number of sellers produce differentiated products, and entry into and exit from the market is relatively easy. (See page(s) p. 228) |
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| mutual interdependence | A situation in which a change in strategy (usually price) by one firm will affect the sales and profits of other firms. (See page(s) p. 236) |
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| Nash equilibrium | An outcome in a non-cooperative game in which players choose their best strategy given the present strategies the others have chosen. (See page(s) p. 239) |
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| nonprice competition | A selling strategy in which one firm tries to distinguish its product or service from all competing ones based on attributes other than price. (See page(s) p. 229) |
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| oligopoly | A market structure in which a few large firms produce homogeneous or differentiated products. (See page(s) p. 235) |
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| price leadership | An implicit understanding oligopolists use that has the dominant firm initiate price changes and all other firms follow. (See page(s) p. 246) |
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| prisoner's dilemma | A type of game between two players that shows the difficulty of cooperating when the two cannot communicate with each other, even when it is in their best interest to cooperate. (See page(s) p. 239) |
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| product differentiation | A strategy in which one firm's product is distinguished from competing products by means of its design, related services, quality, location, or other attributes (except price). (See page(s) p. 228) |
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| tacit understanding | Any method by competing oligopolists to set prices and outputs that does not involve outright collusion. (See page(s) p. 245) |