Microeconomics: Oligopolistic Markets (In English and Hindi)

Oligopoly is a fascinating market structure due to interaction and interdependency between oligopolistic firms. What one firm does affects the other firms in the oligopoly.

The reason there are more than one model of oligopoly is that the interaction between firms is very complex. It depends on whether the product is homogeneous or differentiated, whether there is a dominant firm, whether firms compete based on output or price, etc.

Sometimes firms in an oligopoly try to form a cartel by agreeing to fix prices or to divide the market among themselves, or to restrict competition some other way. The primary characteristic of the Cartel Model is collusion among the oligopolistic firms to fix prices or restrict competition so that they can earn monopoly profits.

In this Course you will learn

1. The behaviour of Oligopolistic Markets

2. The Cournot Model to understand the Equilibrium : Cournot equilibrium is the output level at which each firm in the oligopoly maximizes its profit given the output level of all other firms. No firm can gain from changing its output level away from Cournot equilibrium because the response of other firms will wipe out any additional profit.

3. The Stackel Berg Model : A Stackelberg oligopoly is one in which one firm is a leader and other firms are followers. This model applies where: (a) the firms sell homogeneous products, (b) competition is based on output, and (c) firms choose their output sequentially and not simultaneously.

4. The Bertrand Model ( Can a Pricing strategy be designed in case of Homogeneous Goods)

5. The Differentiated Pricing Model ( Competitive and collusive Equilibrium)