Archives: October2009

• Collusion

  In the era of OPEC, there is no need to justify the interest of industrial economists in collusion. If nominally independent firms can coordinate their actions, they may be able to restrict group output and raise the price of their product above the marginal cost of production. By so doing, each firm will increase its [...]

• Conduct

  Firm conduct is a subject that becomes interesting only when competition is in perfect. Under competition, a firm can sell all it wishes at the market price, but only at the market price. In such circumstances, a firm has no incentive to advertise, to react to what rivals do, or to attempt to discourage entry. [...]

• Product Differentiation

  In simple models of competition, rival firms sell a standardized product. This is never the case in the real world. Products or always differentiated in some way, if only by the location of the supplying firm. As differentiation in creases, the products of different producers become poorer substitutes for one another. As differentiation in creases, [...]