mutual interdependence occurs when course hero

What is a mutual interdependence?

mutual interdependence. A situation in which a change in price strategy (or in some other strategy) by one firm will affect the sales and profits of another firm (or other firms); any firm which makes such a change can expect the other rivals to react to the change.

Which statement is an example of mutual interdependence?

Which statement is an example of mutual interdependence? The stability of a cartel is improved if: the participating members have similar cost structures.

What role does mutual interdependence play?

24:5426:09ALL about OLIGOPOLY firms (mutual interdependence, kinked DD curve)YouTubeStart of suggested clipEnd of suggested clipThe three different efficiencies. And then explain to us what rigid pricing and majorMoreThe three different efficiencies. And then explain to us what rigid pricing and major interdependence of an oligopoly firm is all about.

In which market model is there mutual interdependence?

Oligopolies are typically characterized by mutual interdependence where various decisions such as output, price, advertising, and so on, depend on the decisions of the other firm(s).

What is mutual interdependence in psychology?

Interdependence theory is a social exchange theory that states that interpersonal relationships are defined through interpersonal interdependence, which is "the process by which interacting people influence one another's experiences"(Van Lange & Balliet, 2014, p. 65).

Why is mutual independence important under oligopoly?

Mutual interdependence important under oligopoly , but not so important under perfect competition and monopoly because : • Since the number of oligopoly firm is small , change in price or output by one firm can have direct effect on another firm .

What is the importance of mutual interdependence in decision making?

A key characteristic of oligopolies is that each firm can affect the market, making each firm's choices dependent on the choices of the other firms. They are interdependent. The importance of interdependence is that it leads to strategic behavior.

How do oligopolies occur?

Oligopolies occur when a small number of firms collude, either explicitly or implicitly, to restrict output or fix prices, in order to achieve above normal market returns. Oligopolies can be contrasted with monopolies where only one firm exists as a producer.

Why might oligopolies sometimes be tempted to act in collusion?

Why might oligopolies sometimes be tempted to act in collusion? Oligopolies produce generally similar products and often compete on a non-price basis, leading them to act interdependently. This interdependence entices them to act together to set prices or cooperate closely for the benefit of all the firms.

Does monopolistic competition have mutual interdependence?

With a large number of firms there is no mutual interdependence among firms so each firm acts independently.

In which of the following market structures is there clear cut mutual interdependence with respect to price output policies?

In which of the following market structures is there clear-cut mutual interdependence with respect to price-output policies? Oligopoly. Economists use the term imperfect competition to describe: those markets that are not purely competitive.

How many companies are in an oligopoly?

A monopoly is a market with only one producer, a duopoly has two firms, and an oligopoly consists of two or more firms.

What is mutual interdependence?

Mutual interdependence is when two or more entities depend on one another. In the case of an oligopoly, companies within a market are mutually interdependent. Each company has to consider the consequences of a change in strategy on competitors within that market. Oligopolists try to maximize profit.

What is an oligopoly?

An oligopoly is a form of market. In oligopolies, the number of oligopolists, the sellers or producers, is limited. The word "oligopoly" comes from medieval Latin, where "oligo" means "a few" or "small" and "poly" means "to sell.". Mutual interdependence is when two or more entities depend on one another. In the case of an oligopoly, companies ...