This document discusses the concept of oligopoly, which is a market structure with a small number of producers. It describes key characteristics of oligopoly, including that firms recognize their interdependence and can influence market prices through their actions. The document also discusses game theory and how it can be used to analyze firm behavior in oligopolistic industries, using examples like the prisoner's dilemma. It notes that tacit collusion is possible if firms interact repeatedly through strategies like "tit for tat."