An oligopoly can be similar to a competitive market. Explain two ways they are similar and two ways they are different?

A firm that is in an oligopoly market will try to attain the benefits (for them) of acting like a monopoly by colluding with the other firms in the market and forming a cartel. However, these can break down to the point where the market is more similar to a competitive market. Explain why these agreements often break apart (be sure to include explanation of the Nash equilibrium and Dominate Strategy).

Why does an oligopoly market not just become a competitive market?

Answer rating: 100% (QA)

Similarities 1 Product Differentiation Both oligopoly and competitive markets can involve product differentiation where firms differentiate their prod... View the full answer