IB Economics HL 2.11.5 (HL)—Oligopoly Question Bank

• Oligopoly can be collusive or non-collusive

• Interdependence creates risk of price war, incentive to collude, and incentive to cheat

• Oligopoly may create allocative inefficiency

• Firms may use price and non-price competition

• Market concentration can be measured using concentration ratios

• Diagram: collusive oligopoly acting as a monopoly

• Diagram: simple game theory payoff matrix