Practise IB Economics HL 2.11.5 by analysing concentration, strategic interdependence, collusion, game theory, price rigidity and non-price competition with marked exam evidence.
Explain why a firm in an oligopoly market structure might collude with other firms in the same market.
Answers may include:
- Terminology: oligopoly, market structure, collusion.
- Diagram: to show a collusive oligopoly, payoff matrix.
- Theory: an explanation of why an oligopoly might collude with other firms, including to increase profits, to reduce uncertainty, to prevent price wars, to maintain market share, and to gain more market power by acting like a monopoly.
Assessment Criteria
Part (a) 10 marks
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-2
- The response indicates little understanding of the specific demands of the question.
- Economic theory is stated but it is not relevant.
- Economic terms are stated but they are not relevant.
3-4
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
5-6
- The response indicates understanding of the specific demands of the question, but these demands are only partially addressed.
- Relevant economic theory is partly explained.
- Some relevant economic terms are used appropriately.
- Where appropriate, relevant diagram(s) are included.
7-8
- The specific demands of the question are understood and addressed.
- Relevant economic theory is explained.
- Relevant economic terms are used mostly appropriately.
- Where appropriate, relevant diagram(s) are included and explained.
9-10
- The specific demands of the question are understood and addressed.
- Relevant economic theory is fully explained.
- Relevant economic terms are used appropriately throughout the response.
- Where appropriate, relevant diagram(s) are included and fully explained.