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10-5 Price and Output Decisions for an Oligopolist Mutual interdependence among firms in an oligopoly makes this market structure more difficult to analyze than perfect competition, monopoly, or monopolistic competition. The price-output decision of an oligopolist is not simply a matter of charging the price where MR = MC. Making price and output decisions in an oligopoly is like playing a game of chess. One player's move depends on the anticipated reactions of the opposing player. One player thinks, "If I move my rook here, my opponent might move her knight there." Likewise, a firm in an oligopoly can have many different possible reactions to the price, nonprice, and output changes of another firm. Consequently, there are different oligopoly models because no single model can cover all cases. The following is a discussion of five well-known oligopoly models: (1) nonprice competition, (2) the kinked demand curve, (3) price leadership, (4) the cartel, and (5) game theory.

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