Oligopoly and Oligopsony: Classic Models

This chapter examines the classic models of the microeconomic theories of oligopoly and oligopsony. It explains that oligopoly is a market structure in which there are only a few important sellers and oligopsony is one in which there are only a few important buyers. Under an oligopsonistic market, the profits of each buyer depend materially on the actions of other major buyers, while under its oligopolistic counterpart, firms are rivals and strategic interaction is important. This chapter also provides several relevant computational exercises and solutions.