chapter  8
Product Differentiation
Pages 18

In this chapter we turn from oligopolistic pricing to an aspect of non-price competition which can be very important in oligopolistic markets. In contrast to the perfectly competitive model in which a large number of sellers all produce exactly the same product, in an oligopoly the firms typically produce differentiated or heterogeneous products and are thus able to compete by varying the characteristics of their products as well as, or indeed instead of, changing their prices.