thirteenthirteenchapterchapter©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.Preparedby:Fernando&YvonnQuijanoOligopoly:FirmsinLessCompetitiveMarkets2of21©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER13:Oligopoly:FirmsinLessCompetitiveMarketsAfterstudyingthischapter,youshouldbeableto:Showhowbarrierstoentryexplaintheexistenceofoligopolies.Usegametheorytoanalyzetheactionsofoligopolisticfirms.Useasequentialgamestoanalyzebusinessstrategies.Usethefivecompetitiveforcesmodeltoanalyzecompetitioninanindustry.CompetingwithWal-MartLEARNINGOBJECTIVES1234…Inanoligopoly,afirm’sprofitabilitydependscruciallyonitsinteractionswithotherfirms.3of21©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER13:Oligopoly:FirmsinLessCompetitiveMarketsOligopolyOligopolyAmarketstructureinwhichasmallnumberofinterdependentfirmscompete.Theapproachweusetoanalyzecompetitionamongoligopolistsiscalledgametheory.4of21©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER13:Oligopoly:FirmsinLessCompetitiveMarketsOligopolyandBarrierstoEntryBarrierstoEntryLEARNINGOBJECTIVE1BarriertoentryAnythingthatkeepsnewfirmsfromenteringanindustryinwhichfirmsareearningeconomicprofits.ExamplesofOligopoliesinRetailTradeandManufacturing13-1RETAILTRADEMANUFACTURINGINDUSTRYFOUR-FIRMCONCENTRATIONRATIOINDUSTRYFOUR-FIRMCONCENTRATIONRATIOWarehouseClubsandSuperstores90%Cigarettes99%DiscountDepartmentStores88%Beer90%Hobby,Toy,andGameStores70%Aircraft85%Radio,Television,andOtherElectronicStores62%BreakfastCereal83%AthleticFootwearStores62%Automobiles80%CollegeBookstores58%DogandCatFood58%PharmaciesandDrugstores47%Computers45%5of21©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER13:Oligopoly:FirmsinLessCompetitiveMarketsOligopolyandBarrierstoEntryBarrierstoEntryEconomiesofscaleEconomiesofscaleexistwhenafirm...
