ISOPROFIT CURVE

A function that defines the combinations of outputs produced by all firms

that yield a given firm the same level of profit.

FIGURE 9-4
FIGURE 9-5

FIGURE 9-6
figure 9-7
figure 9-8

Collusion
Figure 9-9
Figure 9-10

Stackelberg Oligopoly
An industry is characterized as a
Stackelberg oligopoly if:
1. There are few firms in the market
serving many consumers.
2. The firms produce either differentiated
or homogeneous products.
3. A single firm (the leader) selects an
output before all other firms choose
their outputs.
4. All other firms (the followers) take as
given the output of the leader and
choose outputs that maximize profits
given the leader’s output.
5. Barriers to entry exist.

Figure 9-11