Chapter 4 Outline
A. Market Power
1. Firms have market power when the following conditions exist.
a. Firms can influence price in attempts to increase profits.
b. The existence of profits does not attract new firms into the industry.
B. Monopoly
1. A monopoly is a single seller of a product with no dose substitutes.
C. Oligopoly
1. An oligopoly is a market with a few producers or sellers of a good.
D. Cartel
1. A cartel is an organized group of firms who manage output and pricing as if they were a monopoly.
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