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Oligopoly Presentation
 

Oligopoly Presentation

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    Oligopoly Presentation Oligopoly Presentation Presentation Transcript

    • Oligopoly
    • What We’re Going To Cover
      What in the World is Oligopoly?
      What Types of Oligopoly are there?
      Deciding Cost, Revenues, Profits
      The Mystery of Prices in Oligopoly
      The Strengths of Oligopoly
      The Weaknesses of Oligopoly
      And Finally, Our Product
    • What Is Oligopoly?
      Few firms in industry
      Many buyers
      Firms have to predict competitor’s reaction
      Market Examples: Cigarettes, Motor Vehicles, Airline Carriers
    • Types of Oligopoly
      Perfect Oligopoly
      Products are identical
      Docomo, AU and Softbank
      Imperfect Oligopoly
      Products are differentiated
      iPods and Zune
      Duopoly
      Only two firms in industry
      JAL and ANA
    • Costs
      Fixed Costs
      Rent
      Interest on loans
      Insurance
      Variable Costs
      Labor
      Materials
      Packaging
    • Costs
      Average Cost
      Increasing Marginal Returns
      Constant Marginal Returns
      Diminishing Marginal Returns
      Marginal Costs
      The cost to make one additional output
    • Cost
      Graph with Marginal and Average Cost
    • Revenue
      Elastic
      MC = MR = Able to Maximize Profit
    • Profit
      Abnormal or Supernormal Profit
      MC = MR = Profit
    • Price
      Collusion of Firms
      Prices decided by a few firms
      Non Price Competition
      Strategy rather than price
      Advertising
      Branding
      Product Innovation
      Packaging
      Product Guarantees
      Free Samples & Gift Offers
      Non-Collusion of Firms: Why Price Is Still Constant
    • Price
      The Confusing Part: Kinked Graph
    • Strengths of Oligopoly
      Few firms in industry, meaning we eliminated competition by being the best
      We benefit from the economies of scale
      Utilization of Larger Equipment
      Specialization of Workers
      Purchase of Supply at Low Prices
      Ease of Finance
      Capable of Diversifying
      Strengths of Oligopoly allows the maximization of our profits
      Lower Costs Offered To Consumers
    • Weaknesses of Oligopoly
      Few Competitions
      Less Innovations
      Suffer From Diseconomies of Scale
      Poor Communication
      Slow Decision Making
      Growth of Bureaucracy
    • The Oligarchs
      Camera
      Touch Screen
      12.1 Megapixels
      8x Optical Zoom
      Shock Proof
      Water Proof
      Specifications
      95x50x20mm
      100g
    • Conclusion
      Oligopoly – Few firms but many buyers
      Three types: Perfect, Imperfect, Duopoly
      MC = MR is where we can maximize our profit
      Price may be determined by firms
      Kinked Graph explains why price remains the same even if it is not agreed upon
      Able to maximize our profits due to the size of company
      Suffer disadvantages due to the size of company