Advantages And Disadvantages Of Being An Oligopoly For The...

Advantages And Disadvantages Of Being An Oligopoly For The...
Part 3
3.1 Advantages and Disadvantages of being an Oligopoly for Firm One of the advantages that being an Oligopoly for the firm is making large
profits. Since there are fewer players in the market, the firms which are involved in the market have the potential to bring a lot of profits. It is
generally highly needed or wanted by the large majority of the population when the services and goods that are controlled by oligopolies. For
example, Marlboro is the best selling brand of cigarettes in the world and it is also counted as the 27th of world's most valuable brands. Smokers
are generally loyal towards brand and taste of cigarettes, they would choose Marlboro cigarettes as their choice if they prefer it and this will satisfy
their needs. In our country, Marlboro and Dunhill's price are can be sold almost at the same price because of their branding. Besides, ... Show more
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Price competition can use discounting the price of production to increase the market share. In an oligopoly, there are less risky in the non–price
competition. As an example, Marlboro and other brands of cigarette have their own ways to advertise their product and through this advertisement,
customers can compare and choose the product they prefer. Furthermore, because of the imperfect competition, there are many different branded goods
are selling for customers in oligopoly industry so there are many choices for customers and the welfare is increased. It brings a lot of benefits for the
customers (Anderton, 2008). For instance, there are many brands of cigarettes are promoted in the market such as Dunhill, Salem, Mild Seven, Kent,
Perilly's, Winston and
... Get more on HelpWriting.net ...

Monopolies, Oligopolies and the Economy
Monopolies, Oligopolies and the Economy
Monopoly is a term to describe an industry where a seller of a product or service does not have a competitor offering a close substitute. The word is
derived from the Greek words monos (meaning one) and polein (meaning to sell). Rarely does a pure monopoly exist. In a pure monopoly there is only
one company making and selling the item in question; however there can also be the situation where there is one company who has the bulk of sales
and the other firms in the same market have little or no impact on the overriding company. Due to lack of competitors, the monopoly company has
control of the supply and price of the good or service, unless there is government intervention. The monopoly will ... Show more content on
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In order for the monopoly to remain, there has to be some sort of barrier to entry for new companies to enter the industry. Examples of barriers to
entry would include high start up costs, limited resources, patents or legal barriers. A company can become a monopoly in different ways. In the case
of Viagra, although the patent and monopoly were later lost, the company earned its monopoly position by offering the only product approved and
patented for erectile dysfunction. In the case of the USPS the government outlawed any competition for them creating a monopoly.
While a monopoly usually involves one firm with significant control on the market, an oligopoly contains a few firms. An oligopoly is a market
structure where a few companies selling identical or differentiated products control the marketplace. The few players in an industry are usually quite
large compared to the market for the product, thus giving these few players an advantage at market control. There are barriers to entry in oligopolies
that include patents or government grants, ownership of resources, cost prohibitive barriers, brand equity and diminishing average cost. The leaders of
companies within oligopolistic industries monitor decisions made by other players in the industry; this is called interdependency. The major companies
within an oligopoly tend to compete through product differentiation or advertising

The Market Of Monopoly, Oligopoly And Duopoly Monopoly
Introduction
There are different types of market situation a firm has to face which directly affect the price and the quantity demanded and supplied in the economy.
The major types of market structures prevalent in the economy are perfect competition, monopolistic market, monopoly, oligopoly and duopoly. Here,
in this essay we will be elaborating about three market conditions i.e. monopoly, oligopoly and duopoly where monopoly is characterized by single
seller in the market selling unique products with high barriers to entry which makes it difficult or impossible for others firms to enter the market. As a
result, firm can enjoy abnormal profit by owning the fundamental resources, licenses and patents that create legal barriers to other ... Show more content
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New Zealand Stock Exchange which can be called as only competitor is also interested to help them rather than competing with them. Likewise,
Australia has the legalized monopoly in the field of casino and gambling licenses. For example, tatts lotto and TAB operations in Queensland, Southern
Australia, Northern Territory is legally protected. In addition to this, city link trains are also enjoying monopoly n the major cities like Sydney,
Melbourne and Brisbane (Dunn 2006). Through monopoly firms want to maintain the standards and retain the prices ( Darren 2012).
In the monopoly market situation the profit is maximum at a point where marginal cost (MC) is equal to marginal revenue (MR) where equilibrium
price is P1 and cost being ATC1 leading to abnormal economic profit which is shown by the shaded area (Hubbard et. al. 2013).
With limited options the oligopoly tends to largely ignore the actual consumer because they have such little market power so, consumer orientation is
low in an oligopoly and the investment in market research tends to be low to non– surviving. As a result of all this, oligopolistic markets have highly
loyal customers due high brand awareness but very low in brand associations and exhibits low differentiation from each other. In Australia 80 percent of
national retail banking is ruled by four big banks i.e. National Australia bank (NAB), Common Wealth Bank, Australia

Barriers Of Oligopoly
2. Economic Theory
2.1Oligopoly
Oligopoly is a market structure in which a few firms dominate the market (Jocelyn Blink & Ian Dorton, 2012). The market may have a large number
of firms or just a few, but the important idea is that the industry's output is shared by a small number of firms. It is possible for oligopolistic
industries to differ, in the sense that some industries would produce the same kind of products, where the product is practically the same and only the
companies name is different. On the other hand, there are also industries that produce completely different product and also ones that produce
products that are only a bit different from each other, but these firms do tend to spend most of their budgets to advertise their products (Jocelyn Blink
& Ian Dorton, 2012). There are a few main characterises of firms that operate as oligopolies these include:
1.Interdependence
2.Strategy
3.Barriers to entry o Natural barriers o Artificial barriers
When economists determine the competitiveness of market they usually look at the assumptions of the different market structures. The same ... Show
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These obstacles are known as barriers to entry. There are generally two types of barriers to entry that exist, these are natural and artificial. Natural
barriers can be exploited by the major firms and the artificial barriers can be used belligerently to stop other firms from joining the market.
Natural Barriers to Entry:
Economies to Scale
Larger firms tend to have lower cost compared to smaller firms, due to the fact that they are able to gain from economies of scale, but it is possible
for larger firms to experience diseconomies of scale. As firms increase their production scale they tend to lower their production cost and move to the
long run, this can be represented using the diagram

Oligopoly : The Four Theories Of Market Structure
Market structure is defined as the particular environment of a firm, the characteristics of which influence the firm's pricing and output decisions. There
are four theories of market structure. These theories are: Pure competition Monopolistic competition Oligopoly Monopoly
Each of these theories produce some type of consumer behavior if the firm raises the price or if it reduces the price. The theory of pure
competition is a theory that is built on four assumptions: (1.)There are many sellers and many buyers, none of which is large in relation to total
sales or purchases. (2.) Each firm produces and sells a homogeneous product. (3.) Buyers and sellers have all relevant information about prices,
product quality, sources of supply, and so forth. (4.) Firms have easy entry and exit. A pure competitive firm is a price taker. A price taker is a
seller that does not have the ability to control the price of the product it sells; it takes the price determined in the market. The pure competitive firm
is a price taker because a firm is restrained from being anything but a price taker if it finds itself one among many firms where its supply is small
relative to the total market supply, and it sells a homogeneous product in a an environment where buyers and sellers have all relevant information.
Examples of perfect competition include some agricultural markets and a small subset of the

Oligopoly Analysis
The automotive industry has drastically transformed since World War II. In the early 20th century America had many booming car companies with an
array of beautiful designs. Early 20th century automobiles were a thing of art, each brand having their own unique signature design. The article by
Thomas Lifson, titled Oligopoly and the fall of the American automobile industry describes this event that unfolded in America's auto industry. The
article highlights how oligopolies in the automotive sector made for competitive prices, however, what consumers gained in bargain they lost in the art
that went into a unique design.
Post World War II the creation of what is known as the "Big Three" comprised of Ford, General Motors, and Chrysler dominated the American
automotive industry, earning massive profits. This domination of the market known as an oligopoly was destroying the diversity of the American car
market. As Lifson mentions smaller manufactures such as Hudson, Nash, Packard, as well as, Studebaker were doomed in wake of the big three. The
oligopoly was making the car market less and less diverse as time went on.
As competition rose between the top three manufacturers the products became more competitive to one another by being more comparable. The
consumer could now ... Show more content on Helpwriting.net ...
These foreign options surprisingly were from countries were at war with a few decades prior. This competition from once enemy nations brought
controversy to the older generations of consumers. "The first danger sign came with the growing success the Volkswagen Beetle enjoyed in the
American automobile market." (Lifson) With foreign automakers making a debut on the American car market, the American manufactures lost their
previous advantage of controlling the market. The foreign auto makers now offered another advantage the American manufactures were struggling
with, fuel efficient

Economic Analysis of an Oligopoly Market Structure
1.Introduction
1a. Article Summary
In this article Michael Baker discusses the livelihood of small retailers in a market subjugated by the financially dominant oligopolies, Woolworths and
Coles. While the small independent retailers in direct competition with Woolworths and Coles provide some competitive respite for consumers, as they
encourage competitive pricing, albeit predatory pricing, it is clear that Woolworths and Coles control the supermarket industry in Australia, in the
formation of a duopoly. It is evident that Woolworths and Coles engage in predatory pricing in an attempt to eliminate independent retailers from the
market. This article discusses recent efforts made by the Australian government and the Australian Competition... Show more content on
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Woolworths and Coles would have agreements with farmers to supply exclusively to them, in exchange for the firm purchasing all of their quality
produce. Woolworths and Coles are also more likely to be able to purchase products, including fruit and vegetables, for a cheaper price than small,
independent sellers, as they are purchasing in bulk. According to McKenzie (2002) "No major supplier, no matter how big or powerful they are, can
afford to be offside, or out of favour, with Coles or Woolworths".
Economies of scale give Woolworths and Coles an advantage over smaller retailers because, as a result of their large scale production, they are able
to produce at a lower average cost, allowing them to sell goods to consumers at a lower price. This competitive pricing eventually forces smaller
firms out of the market, as they are unable to match the predatory pricing, due to a lack of economies of scale.
Because Woolworths and Coles generally have homogenous products, they rely on a heavy use of advertising, in order to avoid competitive pricing
with each other. Oligopolies tend to avoid competitive pricing at all costs, as the worst case scenario of this is a price war, which generally cannot be
escaped, resulting in one survivor, who goes on to become the monopolist.
It is evident that Woolworths and Coles are mutually interdependent, whereby each of the firms pricing strategies relate to, and depend on, each

General Motors Oligopoly Essay
The average level of profit per annum is approximately $5.02 billion USD. As shown by the table above, the average revenue, $39 256.20, is
significantly greater than the average total costs,34 289.20. Although we cannot ascertain what the level of normal profit for General Motors truly is,
considering the revenue earned is approximately $5 billion greater than the total costs, General Motors is clearly charging significantly more for
vehicles than just the price that covers costs. Thus there is a presence of abnormal profits proving that the firm is operating in an oligopolistic market.
Additionally, the firm 's ability to charge a significantly greater price for each unit sold, shows its 'price making ' behavior in the industry. Often firms
will drive down prices to intentionally ensure new entrants in the market cannot sustain this loss of revenue. However the fact that there has not been
any significant price reductions in the past years of operation proves that the threat of competition is not enough to force prices down towards normal
profit levels and there are thus high barriers to entry.
3. Non–Price Competition
As previously discussed, prices in the automotive industry tend to stick at their current set price and only increase or decrease within a small range.
Since firms in an oligopoly do not compete by adjusting the price of their products, they compete using non–price related methods.
To begin, one way in which General Motors broadens its consumer base is

Case Study Of Oligopoly And The Indian Telecom
"Oligopoly and the Indian Telecom"
Course title –Managerial Economics
By: Prof. Santanu Gupta
Assignment by: Ms Charu Sharma
To begin with all are competing with each other to leave their mark and be profitable than others and one of the most important case of such kind of
imperfect competition is termed as oligopoly.
Something which is widespread and the only difference we make out is that they are more concentrated in a competitive market as compared with
monopoly, is another way to describe Oligopoly. For sure competition is seen in the Oligopoly as well which leads to almost the same services or
approximately the same prices on the same products with minor variations.
The classic case of Oligopoly is the cellular market of India ... Show more content on Helpwriting.net ...
Additionally few other points to be noted which are really not that easy to be taken up while entering a market of few strong players like initial high set
up cost, licenses, government regulations, patents and copyrights.
Homogenous nature of the Telecom Industry–All the products are same and companies dealing cannot offer anything out of the scope so it becomes
all the more powerful feature for them. Further to elaborate there are few oligopolies like leather which although have differentiated or heterogeneous
products but the base product which is leather is same for all only the product line could vary.
When the market is controlled by a small number of big sellers and for any new company it is not easy to enter and establish owing to valid reasons
mentioned above and we can experience this in the Indian telecom

Similarities Between The Fur Trade Economy And A Modern...
An Analysis of the similarities and differences between the Fur Trade economy and a modern oligopoly.
The North American fur trade started in the 1500's as the result of early, sporadic contact and trade between aboriginal societies and European
fishing crews located off the banks of Newfoundland and the St. Lawrence region. Animal pelts, which were harvested by the natives, were
exchanged for European goods such as weapons, tools and textiles. The beaver, whose inner coat was used to make the fashionable felt hat in Europe,
was the principal and most valuable pelt that was traded. "By 1600, not only was the felt hat popular, but changing fashion led to widened brims and
thus an increase in the amount of beaver fur required per item ... Show more content on Helpwriting.net ...
In essence, the fur trade market was divided amongst these two trading posts. Throughout the 1700's, both the British and French, vigorously competed
with each other for control of the fur trade. The structure and behavior of both entities resemble the characteristics of firms in oligopolistic competition.
In this essay, the structural and behavioral characteristics of firms in the fur trade shall be compared and contrasted to the structural and behavioral
characteristics exhibited by modern oligopolies.
In oligopolistic competition, the market is dominated by a few large firms that produce differentiated or identical goods. For example, the Canadian
market for internet service providers is dominated by Rogers communications, Bell Canada, Telus and Shaw communications. The idea is that although
there may exist other smaller ISP's in Canada, majority of the market share is controlled by these four companies. The fur trade was structured in a
similar fashion with the market being dominated by primarily two firms, the Hudson's Bay Company and the Northwest Company. Thus, the fur trade
mainly functioned as a duopoly (the most basic form of oligopoly where the market for a particular product is dominated by only two firms) until the
merger of the two companies in 1821. Furthermore, oligopolies are characterized as having high barriers to entry that make it difficult for

Market Structures : Perfect Competition, Monopoly,...
Executive summary
The main purpose of this report is to introduce four market structures – perfect competition, monopoly, monopolistic competition and oligopoly, and
their determinations of price and output. It also discussed the possibility for firms to generate profits in the short–run and/or in the long–run within
these four market structures. It will be shown in the discussion that both monopolistic and oligopolistic firms are able to generate profits in both
short–run and long–run, while firms in perfect competition and monopolistic competition could only make profits in the short–run but not in the
long–run. In the last section of the report, it provided a case of a Chinese monopolist in the railway service industry and talked about its pricing strategy
when studying the monopolistic inelastic demand curve.
1.Introduction
Identifying which type of market a firm is performing business in is important for a firm. Being in different types of the market will affect a firm's
ability to determine the price and thus generate profits. It also affects a firm's ability to make profits in the long–run (Dietl 1998). In the case of China
Railway Group Limited which will be discussed in this report, its monopolistic power helps it to regulate the prices of railway tickets as well as to
achieve profits in the long–run. Hence, it is very vital and helpful for a firm to know which market it is in (Robert & Cave 1999), in order to
understand its power to set the monetary value. Having

Firms' Incentives to Avoid Price Competition in Oligopoly...
Firms' Incentives to Avoid Price Competition in Oligopoly Markets
In the UK a few, large firms dominate most industries. These industries are known as oligopoly markets. Oligopoly markets are an example of
imperfect competition. It consists of a market structure in which there is a small number of large firms in the industry hence is relatively highly
concentrated. Barriers to entry and exit are also likely to exist. In oligopoly markets there is product differentiation, the extent of which depends on the
type of product produced. This leads to interdependency, as the actions of one large firm will directly affect another large firm. Therefore, firms are
said to be operating under conditions of ... Show more content on Helpwriting.net ...
Therefore, all firms in the industry would suffer from a sharp fall in profits as they continuously cut prices to compete with each other. Eventually,
prices will have to rise again to restore profitability and the firm that started the price war could have lost market share.
Therefore firms want to avoid price competition as all firms will lose out in the long term due to reduced profits. So there is an incentive for firms to
form a price agreement in order to reduce uncertainty. There is a greater incentive to form price agreements in markets where the demand for the
product is inelastic e.g. sugar, petrol and oil. This is because, increases in prices will lead to increased revenue and in turn higher profits.
There is also a greater incentive for firms to avoid price competition if the product produced has a high cross elasticity of demand. This is a measure
of the responsiveness of the quantity demanded of product A when the price of product B is changed. This means that, consumers can easily find
substitutes if a firm raises its prices.
If the firms have similar costs then firms are also less likely to want to initiate a price war because it would be unprofitable for firms to
simultaneously cut prices as eventually prices would fall bellow total costs.
If there are very high entry barriers new firms will not be attracted to enter the market which allows

Oligopoly And Rigidity
Rigidity in Price: There is little or no change in prices as the market structure is modelled on this aspect of rigidity. Such changes result in change of
market shares and disrupt the co–ordinated functioning of the firms. However, this said, it is well known that power often determines the functioning
of an oligopoly. Players which have influence and monetary worth can manipulate the working of the market in order to suit their needs thus making
them price makers instead of price takers.
Non–price factors: The rigidity in prices prevents any firm from increasing prices therefore, the firms adopt other competitive practices to have an
upper hand in the market. This involves heavy advertising strategies with pamphlets, flyers, commercials and newspaper advertisements. It also
includes placing beneficial offers on products in order to attract customers. This proves to be useful when market share has to be diverted in favour of
a firm.
Oligopolies are characterised by stiff competition and can be seen as a market forms which witness demand fluctuations based on very minute factors.
Thus, advertising and beneficial schemes often determine the popularity of such firms. Airline tickets are often booked on websites which have fixed
plans which provide ... Show more content on Helpwriting.net ...
The pricing leans in favour of the owners of the resources. Ideally, this would make it less affordable for the customers and thus, result in loss of
customers. However, it has been seen that despite this feature this model exists and operates successfully. The reason for this is that the product
offered by the firms operating in such models is unique and this gives the firms control over the behaviour of the market. For instance, the airline
industry offers air travel which reduces time severely and offers a quality of transport which is unique in

The Market Structures
The four defined market structures include perfect competition, monopoly, monopolist, and oligopoly. Although firms within these four different
structures compete within the economic market together, each have their distinct characteristic. Perfect competition includes producers who all
produce the same good. When looking at perfect competition you will see that both the buyers and sellers are price takers. The agricultural market is
one of the few perfectly competitive markets. Amonopoly consist of one product being sold by one seller. In a monopoly one firm controls the market.
Monopolies have high entry barriers eliminating competition and product duplication. If an artist has the ability to produce original sculptures that no
one can duplicate, then they have a monopoly. Monopolist and oligopoly market structures are more common. Monopolist markets consist of several
firms producing similar products. These firms are in competition with one another and have low barriers of entry into the market. Even though they
face competition with other firms, monopolist make strategic decisions for their firms without much thought of the competitor's actions or reactions.
Dove will manufacture and sell their soap without regard to what Ivory may be producing or the selling price of Ivory soap. Oligopoly firms have
some similarities to monopolist, they both maximize profits when MC=MR, and sell products to a wide range of consumers. The difference between
oligopoly and monopolist

Oligopoly : Concept Of Oligopoly
4
Running head: OLIGOPOLY
Concept of Oligopoly Domestic aviation market in the United States is the best example of demonstrating oligopoly. From a recent incident the
United Airlines dragged one of its passengers out of the plane due to overbooking. The incident rightly represented the treatment being given to the
economy class passengers. The main reason for such incident is the market power. According to the statistics in the year 2016, it was noted that
combined shares of the 4 leading airlines in the US were 68% however the current market shows that the shares rose to 80%. (Prijs, 2017)
Oligopoly could be defined as a type of market structure that involves few producers. In this market structure all these small firms compete ... Show
For instance the US airlines have hundreds of sub–airlines that flies between a common destinations. So, when we see these airlines there is no
competition seen however there are only 2–3 main airlines like American and United that are competing with each other. So, to understand oligopoly
it is necessary to look ahead with its understanding rather than just jumping on the conclusion when a subsidiary of the firm is seen. The simplest case
of understanding oligopoly is duopoly where an industry has only two small firms and they get higher profit if they limit their production and
increases their prices. The increased return is the main reason for the prevalence of oligopoly among the big firms. (Prijs, 2017)
It is quite challenging to know about oligopoly by looking at the market structure of an industry. Sometimes the industry may have some of its subtypes
but it may not use it for the profit. For instance, US may have hundreds of airlines but its not necessary that the entire airline in US for the same
destination are competing with each other. There could only be one or two major airlines that may compete with each other like American and United.
Herfindahl–Hirschman Index It is one of the criteria used by economists to have a better idea about the market structure of a company. It is usually
defined as the sum of the squares of market shares of the sub–industries of a firm. Like if a company has 3 sub industries with

Interdependence, Conjectural Variation, Independent Action...
1) Explain the relevance of the concepts of interdependence, conjectural variation, independent action and collusion to our understanding of oligopoly.
The oligopoly theory is based on the importance of the number of firms in an industry as well as on the nature of a product. In oligopoly, the more
similar or homogenous product of different firms is, the greater is awareness of the competitors. In all oligopolistic markets several sellers represent a
substantial proportion of total sales. The fewness of the firms is a key characteristic of oligopoly. As a result of the limited amount of companies in the
oligopoly industry, the main problem is hidden in the recognition of mutual dependence or interdependence of companies (Lipczynski et al., ... Show
In that town we had only one dentist for many years (in the area of 40 km wide), but in 2007 a new doctor came from the neighbouring city and
opened his practice. At the beginning stage, the new dentist had no tangible output, so the 'old' medic had monopoly power and set profit maximization
prices. When the second doctor entered the market, the situation changed, total capacity and output increased while the market power and output level
for the 'old' dentist decreased. However, the old dentist kept higher market share for some period of time due to his reputation and the patients' loyalty
(which is not a part of the Cournot model). But later the loyal customers realized the lack of difference between the old and the new dentists, and also
started to switch to the new doctor. Thus, in the 3–year time span both dentists gradually reached their Nash–Cournot equilibrium where both dentists
had no incentives to increase the output level and where they equally shared the market

Cournot Model In Oligopoly Market
There are 3 theories of economics will be discussed in this chapter. These theories of economics will be discussed are Cournot Model in Oligopoly
Market, Prisoner Dilemma in Game Theory and XXX. First of all, I will discuss what is Oligopoly Market and Cournot Model in Oligopoly Market.
Besides that, these theories were applied during my internship program in Brunsfield Trading Sdn Bhd.
3.1.1Cournot Model in Oligopoly Market
Oligopoly market is a market which have only few firms compete with one another. The products of oligopoly market might or might not differentiated
such as automobile is differentiated and steel is not differentiated. There are barriers for new firms to enter oligopoly market. Examples of oligopolistic
industries are steel, aluminium, petrochemical, automobiles and computers. Some of the reasons for barriers to entry arise in oligopolistic industries
such as scale economics, patents or access to a technology, market reputation and etc. Oligopolistic industries was ... Show more content on
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In the figure 2 shown that demand curve shift to the left from D1 (0) to D1 (50). In the same time, the corresponding marginal revenue also will shift
to left and label as MR1 (50). Now the profit–maximizing output of Firm 1 becomes 25units where MR1 (50) intersects with MC1. Now, suppose
Firm 1 assume Firm 2 will produce 75 units. Demand curve of firm is the market demand curve was shifted to left by 75. In the figure showed that
demand curve shift to left as D1 (75) and the corresponding marginal revenue shifted to MR1 (75). The profit–maximizing output of Firm 1 is 125 unit
where where MR1 (75) intersects with MC1.
Finally, firm 1 will assume firm 2 produce 100 units. The demand curve of firm 1 and marginal revenue curve will intersect on vertical axis which are
not shown in Figure 2. If firm 1 assumes firm 2 produce 100 units or more than that, firms 1 should produce

Market Structure of Oligopoly
Analyse The Structure Of The Market Structure Of Oligopoly And The Difficulty In Predicting Output And Profits
Market structure of oligopoly
Oligopoly is a market structure where there are a few firms producing all or most of the market supply of a particular good or service and whose
decisions about the industry's output can affect competitors. Examples of oligopolistic structures are supermarket, banking industry and pharmaceutical
industry.
The characteristics of the oligopoly are:
В•Small number of large firms dominate the industry
В•High degree of interdependence: the behaviour of firms are affected by what they believe other rivalry firms might do
В•High barriers to entry that restrict new firms to enter the industry e.g. ... Show more content on Helpwriting.net ...
Like monopoly, if the oligopoly is maintained in the long run, it charges a high price, produces less output and fails to maximise social welfare relative
to perfect competition.
Cartel is seen by the government as a means of driving up prices and profits which is against the public interest. As a result it is illegal to operate the
cartel in many countries.
Tacit collusion
Tacit Collusion is collusion that is not organized through a formal, open contract between colluding parties. Tacit collusion is when firms abide to the
price that has been set by a recognized leader. The leader is usually the largest firm i.e. the firm that controls the industry known as dominant firm price
leadership. On the other hand, the leader may be the firm that is most reliable to follow, known as barometric firm price leader.
Dominant firm price leadership

This is when smaller firm chooses the same price as the price set by the large firms in the industry.
Source: www.bized.ac.uk/educators/he/pearson/lectures
The leader tends to maximise profits where marginal revenue is equal to marginal the marginal cost, then produces at QL and sell goods at PL on its
demand curve where marginal cost equal marginal revenue. At this stage other firms in the industry will follow the price. Therefore, the market
produces at Qt, with other firms producing the output not supplied by the leader i.e. Qt–Ql.
Barometric firm price leadership.
Where

Oligopoly: Samuel Slater's Monopolistic Competition
Monopolistic Competition
Monopolistic competition is a market situation in which there are many buyers along with a
relatively large number of sellers. The various products available in this market are similar and
intended to satisfy the same need. However, each seller attempts to make its products different.
Product differentiation is the process of developing and promoting differences between one's
products and all similar products.
Oligopoly
An oligopoly is a market situation (or industry) in which there are few sellers. These sellers are
quite large and must make sizable investments to enter into their markets. Because there are few
sellers, the market actions of each can have a strong effect on competitors' sales.
Monopoly
A ... Show more content on Helpwriting.net ...
в—Џ The domestic system was a method of manufacturing in which an entrepreneur
distributed raw materials to various homes, where families would process them into

finished goods.
The Industrial Revolution
в—Џ In 1790 Samuel Slater, an Englishman, set up a textile factory in Rhode Island to spin raw
cotton into thread. Slater's ingenuity resulted in America's first use of the factory system
of manufacturing, in which all the materials, machinery, and workers required to
manufacture a product are assembled in one place.
в—Џ By 1814 Francis Cabot Lowell had established a factory in Waltham, Massachusetts, to
spin, weave, and bleach cotton all under one roof. Lowell used a manufacturing technique
called specialization. Specialization is the separation of a manufacturing process into
distinct tasks and the assignment of different tasks to different workers for the purpose of
increasing efficiency of industrial workers.
в—Џ The three decades from 1820 to 1850 were the golden age of invention and innovation in
machinery.
в—Џ At the same time, new means of transportation greatly expanded the domestic markets
for American products and by 1900 the nation shifted from a farm economy to

Which of the Cournot and Bertrand Models of Oligopoly More...
There is only one model for monopoly and one for perfect competition but in contrast to these oligopolies have several models to try to explain how
they react, examples of these are the kinked demand curve, Bertrand and Cournot models. A non competitive oligopoly is 'a market where a small
number of firms act independently but are aware of each others actions' (Oligopoly, Online). In perfect competition no single firm can affect price or
quantity this is due to intense competition and the relative small size of the firms, on the other hand there is a monopoly market where there is little or
no rivalry and firms have control over the market. Oligopoly is a state in–between perfect competition and monopoly where the firm can change its ...
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The firm would be unwilling to produce at any point off of its best response curve as profits would suffer the only point both firms can achieve this is
at Cournot equilibrium. The profits made under the Cournot model are above perfect competition but below the maximum they could be when
collusion between firms exists (see fig4 in appendix) which is what encourages firms to collude. In summary the Cournot model shows how firms set
there quantities based off what they think the other firm will do, which is the strategic element in the model (Carlton & Perloff, 2005).
Joseph Bertrand developed his oligopoly model 45 years after Cournot. Bertrand was the first major challenge to the theory Cournot developed, he
argued that Cournots model failed to show how prices were set and by whom, as under his model firms set quantities not prices and no mechanism is
explicitly stated for determining pricing (Carlton & Perloff, 2005). Bertrand's model like Cournot follows the basic assumptions of oligopoly listed
above alongside these that there are two firms in the market (duopoly), they sell identical products (homogenous), constant marginal costs (MC),
blockaded entry and most importantly of all the firm believes its rivals prices are fixed. Consumers in the market will have complete information and
therefore will purchase from the firm with the lowest price, which means if a firm lowers its price

Monopolies, Oligopoly, Monopolistic Competition, And...
Monopolies
When understanding the different types f structures it is important to know the different types of markets that there are. Understanding barriers, buyers
and sellers with knowing the market share and competition is important to understand what barriers are occurring in the market. The different market
structures are Monopoly, Oligopoly, Monopolistic Competition, and Perfect Competition.
Understanding these different type of market structures helps to better understand what type of market is currently occurring. A monopoly is when the
companies are state owned and there is no other entry allowed into the market. An oligopoly is when there are many buyers with few sellers which is
what makes for tough competition. Monopolistic ... Show more content on Helpwriting.net ...
To do so would be to discourage the very effort and innovation that competitive markets are designed to encourage. On the other hand, antitrust
authorities have no reason to allow an enterprise to be an economic bully vis–a–vis outsiders and innovators, just because it has received a position of
market dominance through past exertions, whether economic or political" (Baker, 1993). When we look at monopolies in today's current market in the
telecommunications industry, many people fear that AT&T will overtake the landline communications market and cause higher prices for all
consumers. There are rules that prevent AT&T from telling smaller landline companies that connection exchange rates on the lines will double or
triple if they go over AT&T owned or leased lines. This would cause AT&T to monopolize the market if they were allowed to do this because it would
cause higher prices and eliminate competition in the market. On the other hand of the AT&T market, they also operate a cellular communications
business which also was trying to buy T–Mobile recently but was struck down in court as it would create a mobile monopoly. If AT&T was able to
purchase T–Mobile then they would have owned 43.3 percent of the marketshare, leaving Verizon behind them at 34.4 percent and Sprint at 15.5
percent with some other smaller carriers with the remaining percentage of marketshare. The

The Oligopoly Theory
Running head: Oligopoly Theory
The Oligopoly Theory
OPERATIONS MANAGEMENT
Table of Contents
Abstract......................................................................................................3
Introduction.................................................................................................4
Oligopolistic Competition.................................................................................5
Characteristics of an Oligopoly............................................................................6
Models of Oligopoly Behavior...........................................................................9
Conclusion...................................................................................................11
References..................................................................................................12
Abstract
The goal of this research paper is to provide an overview of the theory of oligopoly and its effect on the global economic stage. We will review what
results when there are fewer companies in ... Show more content on Helpwriting.net ...
When a company suddenly loses market share, which is tantamount to a company eventually closing its doors. Hence, when one a company lowers
its prices, increases its ability to produce or opens a new channel, it forces the other companies to react accordingly or risk losing market share
(Dubovik & Janssen, 2011). Interestingly enough, this mimicking behavior creates an "interdependence" among the oligopolistic companies.
Economists, due to this behavior of these companies, have been incapable of developing a respectable oligopoly theory. Since there are only a limited
number of competitors, these companies are acutely aware of the resulting effects of their decisions has on the other companies. Characteristics of an
Oligopoly According to Salvatore, the oligopoly market structure is most predominant in the manufacturing segment of the industrialized countries

which includes the United States (2007). Some types of oligopoly companies are "steel, automobiles, aluminum, soaps and detergent, glass, cigarette,
electrical equipment and breakfast cereals" (Salvatore, 2007). The following are some of the recurring characteristics of an oligopoly: (1) only a few
firms participate in a particular market place but bigger than the typical company as it pertains to the size of the companies, (2) these firms offer
similar products and/or services or somewhat

Oligopoly Essays
Oligopoly is a market structure in which only a few sellers offer similar or identical products. It is an intermediate form of imperfect competition.
OPEC is an epitome of Oligopoly.
Features of Oligopoly:
Non Price Competition
Interdependent decision making
Entry Barriers
If organizations behave in cooperative mode to mitigate the competitions amongst themselves it is called Collusion. When two or more organizations
agree to set their outputs or prices to maintain monopoly it is called as collusive oligopoly.
OPEC acts as a cartel. If OPEC and other oil exporters did not compete, they could ensure much higher prices for prices for everyone. Output quotas of
its members produced staggering price increases (from $1.10 to ... Show more content on Helpwriting.net ...
On one hand domestic consumption was encouraged and production was discouraged resulted in additional demand for oil from
OPEC and the United states inevitably became more dependent on imported oil during the 1970s.
Perfect Collusion Model:
OPEC recognized their interdependence & decided to collaborate in the matter of pricing their product (Oil). There will be one market demand
function (AR & MR) and many cost functions (AC and MC) as the number of competing countries in the OPEC. So various MC curves can then be
summed up horizontally to get the combined MC (CMC). The point where CMC and MR curve intersect gives the point of maximum profit output.
AR curve will give the equilibrium price. The distribution of industry output among countries would be obtained by equating MR=MC through a
horizontal straight line passing through the point of intersection between CMC and MR curves.
Below is the diagram of Homogeneous oligopoly pricing under perfect collusion:
OPEC output and prices are shown in last part (d) where CMC was obtained by horizontal sum up of MC1 ,MC2 & MC3 i.e. the marginal costs.
AR and MR represent demand and corresponding marginal revenue curves of the OPEC as a whole. OPEC output OQ is divided among the partner
countries as in diagram shown say three as Oq1, Oq2 & Oq3. The sum of these outputs equal OPEC output OQ by construction. Each of the country
sells oil at an uniform price equal to OP which is determined in diagram part (d).

Though

Oligopoly: Monopoly and Demand Curve
An oligopoly describes a market situation in which there are limited or few sellers. Each seller knows that the other seller or sellers will react to its
changes in prices and also quantities. This can cause a type of chain reaction in a market situation. In the world market there are oligopolies in steel
production, automobiles, semi–conductor manufacturing, cigarettes, cereals, and also in telecommunications. Often times oligopolistic industries
supply a similar or identical product. These companies tend to maximize their profits by forming a cartel and acting like a monopoly. A cartel is an
association of producers in a certain industry that agree to set common prices and output quotas to prevent competition. The larger the ... Show more
content on Helpwriting.net ...
Microsoft knows that they have control over the other companies and uses that to their advantage. Over the past few months there has been talk about
dismantling Microsoft Corporation. The U.S. Justice Department has mentioned a breakup of Microsoft, which would help destroy their monopoly in
the computer industry. However, some people still have concern about the disruption of Microsoft and its effect on the computer industry, which has
largely thrived and operated on Microsoft 's standard. Today the phone industry, once the biggest monopoly in U.S. history, is evolving into anoligopoly
consisting of three or four huge carriers. Their intent is to offer an impressive array of long–distance, local, Internet, and wireless services to consumers
and businesses. An example would be that of MCI WorldCom Inc. which has recently reached an agreement to acquire Sprint Corp for an estimated
$115 billion in stock. This deal between MCI WorldCom and Sprint represents the largest takeover in history, and would create the world 's biggest
telecommunications company. This deal brings together the second and third largest long distance carriers in the U.S. with an estimated annual
revenue of about $50 billion. The companies would have 30% of the consumer long–distance market, with more than 30 million long–distance
customers and a global reach from the U.S. to Europe and Asia. The new company, which is going to be called WorldCom, would

Coca-Col Monopoly Or Oligopoly?
When a good or service has only a limited number of sellers and offers the product with little attention to the competition, this is known as an
oligopoly. An oligopoly is different than a monopoly because there are multiple firms that are involved; however, the consumer can be affected in the
same way. Competition can usually be seen as what's best for the customer; however, that's not always the case for the firm. If we observe two firms
that have the leading sales in soda, Pepsi Cola and Coca–Cola, we can see how they form a great example of oligopoly. As the information provides, we
can see that these two drink companies share about half of the soft drink market. Pepsi Cola and Coca–Cola could ideally lower the price of their
drinks in ... Show more content on Helpwriting.net ...
Red Bull, and Monster Beverage corporations. have created higher entry barriers to enter the industry. In oligopoly, the increased difficulty of new
rivals depends on the limited number of firms. This can be contributed to the majority of the soda market being owned by either Coke or Pepsi;
these two corruptions as well as a few others have control and serve the overwhelming majority of the market. These oligopolistic firms have the
most advanced technology to reduce their cost of production; they understand the consumers; and their products are consistently widely available.
When a new rival enters the market, large corporate entities such as Coke or Pepsi have to lower their prices. After time passes, even though they
have made a loss, they are able to survive; however, the new firm typically isn't and must leave the market. Brand loyalty also hurts new firms when
they enter the market, as well as heavily enforced copyrights, registered trademarks, and legal protections by the government. These new firms are still
able to enter the market because it would be illegal to keep them out; however, it takes a lot of effort in the

The Behavior Of Firms Under Oligopoly Market
This essay will attempt to discuss on some models used to understand the behaviour of firms under oligopoly market, where problems of uncertainty
exists and whether collusion between these firms will eliminates it. For simplicity, these models will be explained under the assumption that there are
two firms (duopoly), namely firm A and firm B and both firms produce identical product.
Oligopoly is a type of imperfect competitive market, which consists of few large firms. These firms control the market and sell similar product, which
are usually differentiated by the brand (e.g. Nike and Adidas).The most important features of oligopoly is the interdependence between firms, which
means that the act of a firm will inevitably affect the other firm. However, a firm cannot be sure of how exactly the other firm will respond to their
decision, therefore strategic uncertainty may be used as a tactic in oligopoly.
There are many models discussing on the interaction between firms such as game theory, an analysis of strategic interaction and also conjectural
variation, which will be the underlying discussion for the first part of the essay. Conjectural variation is an assumption that a firm expects a reaction
from other firms in the market based on their movement. This act of conjecturing implies the uncertainty in the market. Conjectural variation is the rate
of change of rival's output with respect to own output (McMillan, 2013).
Equation 1.1:
e.g. dp/dqA= в€‚p/в€‚qA+в€‚p/в€‚qB

Advantages Of Oligopoly
Running head:
OLIGOPOLY MARKET
1
Oligopoly Market
Greg LaPointe
Patten University
OLIGOPOLY MARKET
2
An oligopoly is defined as a small number of companies in a particular market who are competing for the same customer base.
Oligopoly market is between perfect competition and monopolies. Perfect competition means no seller has the market power and monopoly means there
is only one seller with complete market power.
In an oligopoly market
,
t he decisions each company makes im pacts the decisions of the other companies in the same industry or market. These companies can either be related
or dependent of each other.
Sellers in an oligopoly market must understand production, capacity and pricing.
For example if a particular ... Show more content on Helpwriting.net ...
A network that will expand its
OLIGOPOLY MARKET
4
market share in the telecommunications industry by moving before its competitors.
According
to the Verizon annual report and current chairman McAdam
(2014
" strong cash flows have enabled us to invest more than $80 billion in infrastructure over the past five years
"
(p. 3) has enable the company to expand into an additional 500 markets. This investment enables Verizon

Communications to lead the market in telecommunications service s and lead the way with new innovations. Verizon is building their infrastructure
for the future and has made acquisitions that position them as the leader of the industry. Differentiating themselves from the competition and investing
into their networks enable Verizon to support greater customer demand and capacity.
Market costs remain constant and profitability will remain high. Overall revenues for Verizon
Communications
within their strategic services increased 2,3% in 2014 from 2013 levels. The i nvestment in differentiating themselves from the market enables this
growth n ow and in the future . This is why I consider
Bertrand
Oligopoly as the best type of investment

Oligopoly Market Structure
Oligopoly Oligopoly is a market structure in which the number of sellers is small. Oligopoly requires strategic thinking, unlike perfect competition,
monopoly, and monopolistic competition. Under perfect competition, monopoly, and monopolistic competition, a seller faces a well defined demand
curve for its output, and should choose the quantity where MR=MC. The seller does not worry about how other sellers will react, because either the
seller is negligibly small, or already a monopoly. Under oligopoly, a seller is big enough to affect the market. You must respond to your rivals' choices,
but your rivals are responding to your choices.
In oligopoly markets, there is a tension between cooperation and self–interest. If all the ... Show more content on Helpwriting.net ...
Jack does not care that Jill's output is sold at a lower price.
The price effect is smaller for duopoly than monopoly, and the quantity effect favors more output whenever price is above marginal cost. Therefore, the
Nash equilibrium price will be closer to marginal cost than the monopoly price. The more firms in the oligopoly, the smaller the price effect will be,
and the lower the Nash equilibrium price. When the number of firms approaches infinity, the price effect approaches zero. Therefore, each seller will
increase output whenever the price is above marginal cost. In the limit, we have the perfectly competitive price, and the socially efficient quantity.
A Brief Introduction to Game Theory Game Theory can be used to study oligopoly games other than the "quantity competition" game played by
Jack and Jill, as well as arms races, voting games, bargaining games, and so on. A Game is defined to be: A set of players A set of possible strategies
for each player, A payoff or outcome function that assigns payoffs to each player for each combination of strategies (one strategy for each player).
The Prisoners' Dilemma Bonnie and Clyde are caught with illegal weapons (1 year sentence), but are suspected of bank robbery. Interrogated in
separate rooms. If both remain silent, one year each. If one confesses, and testifies against the other, he or she will get immunity and the other gets 20
years. If both confess, their testimony is

Oligopoly
This paper will focus on the behaviour of oligopolists and the situations they are confronted with in their daily business.
The paper is divided in three parts. The first part explains the basic keywords. The second part tries to explain the nice and the sad sides of an
oligopolist, and will discuss the consequences of their behaviour.
As well, I will try to examine the statement "being an oligopolist is not easy", and whether it is true or whether the truth lies in between.
Aspects of Market Structure
The four types of market structure are listed in the drawing below:
Characteristics of an oligopoly
Definition
Oligopoly is a type of imperfect competition with a market structure, that has only a small group of ... Show more content on Helpwriting.net ...
An oligopoly is a form of economy. Using the four–firm concentration ration, an oligopoly is defined as a market in which the four–firm concentration
ratio is above 40% according to Wikipedia.
In more general terms, a way of measuring market share is to look at the concentration ratio (CRN): The N–firm concentration ratio is the percentage
of market output generated by the N largest firms in the industry. We already covered the most used– CR4 – percentage of sales of the 4 top firms in
the industry.
One measure of this ratio is the 5 firms concentration ratio which shows the market share of the 5 largest companies.
Normally an oligopoly exists when the top five firms in the market account for more than 60% of total market demand/sales. Relating to the index
featured above, the market share for standard and emissionsВґ test remained approximately at over

98,76 % for the 5 top market players ( Dekra, TГњV, GTГњ, KГњS, FSP), so the company in which I work is an oligopolist.
Oligopolical games as a Prisoners' Dilemma
For understanding the function of oligopoly games, we need to define the game of prisonersВґ dilemma. It is a game between two captured prisoners
that illustrates why cooperation is difficult to maintain even when it is mutually beneficial.
The oligopoly game is based on the prisonersВґ dilemma. It turns out that the game oligopolists play in trying to reach the monopoly outcome is similar
to the

Difference Between Monopolistic Competition And Oligopoly
The determination of prices of commodities depends upon the type of market structure in which they are produced. There are various markets
prevailing in an economy like (a) perfect competition, (b)Monopoly,(c) Monopolistic Competition, and (d) Oligopoly. Monopoly, monopolistic
competition and oligopoly are generally grouped under imperfect competition, since these three markets differ in respect to the degree of imperfections
in the market.
Before explaining all these markets in detail, it will be quite important to understand the meaning of the term market in economics.
1.2 Meaning of Market
Market in general means a particular place or locality where goods are sold and purchased. However, in economics, by the term 'market we do not
mean any particular place or locality in which goods are bought or sold. The ... Show more content on Helpwriting.net ...
Large number of buyers and sellers: The first important feature of monopolistic competition is that under it there are relatively large numbers of buyers
each satisfying a small share of the market demand for product. The number of buyers in monopolistic competition is also large. Because there is large
number of firms under monopolistic competition, there exists stiff competition between them.
2. Product Differentiation: The second important feature of Monopolistic Competition is that products produced by various firms are differentiated.
This means that the products of various firms under monopolistic competition are not same but similar. Therefore there prices cannot be very much
different. Because of similar products and close substitutes the firms under monopolistic competition compete with each other.
3. Selling Costs: In monopolistic competition the products are close substitutes of one another, In order to differentiate their products firms incurs
selling cost Selling costs refer to the expenditure on advertisements, sale promotions, warranties, customer services, packaging, colours are brand

Oligopoly: Pricing and Game Theory
Key characteristics The main characteristics of firms operating in a market with few close rivals include: Interdependence Firms that are
interdependent cannot act independently of each other. A firm operating in a market with just a few competitors must take the potential reaction of its
closest rivals into account when making its own decisions. For example, if a petrol retailer like Texaco wishes to increase its market share by reducing
price, it must take into account the possibility that close rivals, such as Shell and BP, may reduce their price in retaliation. An understanding of game
theory and the Prisoner's Dilemma helps appreciate the concept of interdependence. Strategy Strategy is extremely important to firms that are... Show
Advertising Advertising is another sunk cost – the more that is spent by incumbent firms the greater the deterrent to new entrants. A strong brand A
strong brand creates loyalty, 'locks in' existing customers, and deters entry. Loyalty schemes Schemes such as Tesco's Club Card, help oligopolists
retain customer loyalty and deter entrants who need to gain market share. Exclusive contracts, patents and licences These make entry difficult as they
favour existing firms who have won the contracts or own the licenses. For example, contracts between suppliers and retailers can exclude other
retailers from entering the market. Vertical integration Vertical integration can 'tie up' the supply chain and make life tough for potential entrants, such
as an electronics manufacturer like Sony having its own retail outlets (Sony Centres), and a brewer like Heineken owning its own chain of UK pubs,
which it acquired from the brewers Scottish and Newcastle in 2008. Collusive oligopolies Another key feature of oligopolistic markets is that firms
may attempt to collude, rather than compete. If colluding, participants act like a monopoly and can enjoy the benefits of higher profits over the long
term. Types of collusion Overt Overt collusion occurs when there is no attempt to hide agreements, such as the when firms form trade associations like
the Association of Petrol Retailers. Covert Covert collusion occurs when firms

Oligopoly: Monopoly and Firms
+ http://www.expertsmind.com/course–help/?p=oligopoly–emergence–causes–98734287402
Oligopoly
Meaning:– Oligopoly is a common economic system in today's society. The word "oligopoly" comes from the Greek "oligos" meaning "little or
small" and "polein" meaning "to sell." When "oligos" is used in the plural, it means "few." Oligopoly is a market structure in which there are a few
sellers and they sell almost identical products.
A situation in which a particular market is controlled by a small group of firms. An oligopoly is much like amonopoly, in which only one company
exerts control over most of a market. In an oligopoly, there are at least two firms controlling the market. ... Show more content on Helpwriting.net ...
The profit–maximizing behaviour on his part may not be valid. The firms under oligopoly are interdependent as they are in a group.
6) Indeterminateness of demand curve :–This characteristic is the direct result of the interdependence characteristic of an oligopolistic firm. Mutual
interdependence creates uncertainty for all the firms. No firm can predict the consequence of its price–output policy. Under oligopoly a firm cannot
assume that its rivals will keep their price unchanged if he makes charge in its own price. As a result, the demand curve facing an oligopolistic firm
losses its determinateness.
The demand curve as is well known, relates to the various quantities of the product that could be sold it different levels of prices when the quantity to
be sold is itself unknown and uncertain the demand curve can 't be definite and determinate.
7) Elements of monopoly :– There exist some elements of monopoly under oligopolistic situation. Under oligopoly with product differentiation each
firm controls a large part of the market by producing differentiated product. In such a case it acts in its sphere as a monopolist in lining price and output.
8) Price rigidity :–Under oligopoly there is the existence price rigidity. Prices lend to be rigid and sticky. If any firm makes a price–cut it is
immediately retaliated by the rival firms by the same

An explanation of monopoly, oligopoly, perfect...
The Australian market is a diverse economic ocean – it has different species of marine life (industries), different swells (market structure) and even 'hot'
and 'cold' spots (public companies). One of the key determinates to a successful national economy is the structure of its markets. The main market
structures are: 1. Monopoly
2. Oligopoly
3. Perfect Competition
4. Monopolistic Competition
Each of these market structures have unique characteristics, and can be classified according to three factors. The degree of competition, the first factor,
is important as it classifies markets into different market structures. It compares the relative sizes of firms, the amount of sellers (vendors) and the
barriers of entry to the market. The ... Show more content on Helpwriting.net ...
They can only accept the prevailing market price. There are no barriers for entry to the industry. Any firm can enter the market and the present sellers
can't stop that firm from entering. Advertising is practically pointless in perfect competition – because the products are virtually indistinguishable from
each other, the purpose of advertising is defeated. Perfect competition is a theoretical market structure. This means that in theory, it is possible, but it is
not usually common practice in an economy. Australia's fruit and vegetable market, however, would be the most similar.
Monopolistic Competition:
Monopolistic competition is a market in which a very limited number of very large firms operate, selling similar products. The main difference between
the products of the companies is packaging and display. In monopolistic competition, advertising plays an extraordinarily important role – the
companies need to distinguish between each others products, and come out saying that theirs is worth purchasing. Another great power in monopolistic
competition is a concept known as 'brand loyalty'. The consumer selects the brand that they prefer or appeals to them the most, and they always buy
that over the competition. The best example of monopolistic competition would have to be Coke and Pepsi. Both companies release a similar beverage,
both have their minor subtleties, and advertising

Oligopoly and the Disney Company.
1. INTRODUCTION Oligopolies have been around ever since there is trade. However, it has only recently gained grounds in this age of
globalisation. Never before has oligopolistic competition been so fiercely contested across so many industries. The media industry in the United States
of America (US) is one such industry. As a powerful communication tool, the media has attracted many companies but only a handful has grown big.
These media giants have dominated the local market and are currently seeking to conquer the global media industry in search of better profits. One of
these media giants is the Walt Disney Company (Disney). Its dramatic growth from a small company to become an oligopolist in the media industry
offers an interesting... Show more content on Helpwriting.net ...
Figure 3 shows that together they dominated 75% market share of the US media industry in 2003 and reach 80% of the prime–time TV audience
through their combined broadcast and cable outlets (Hannaford 2004; Peers 2003). (source: Hannaford 2004) Figure 3: The media conglomerates
market share Of the five, Disney is perhaps the most famous because generations of children have grown up with its cartoon characters. 3. THE
WALT DISNEY COMPANY (DISNEY) Walt Disney started out by producing short animated films in 1922 and in 1928 introduced Mickey Mouse,
the world most famous cartoon character shown in Figure 4 below (Olsson 1996; Kramer 2002). Following this breakthrough, Kramer (2002) found
that Disney proceeded innovatively with new film technologies of sound and colour that resulted in the first successful animated feature Snow White
and the Seven Dwarfs in 1937. (source: Disney.com 2004) Figure 4: Mickey Mouse There was no turning back after that. Disney went on to become a
major international corporate giant in the US media industry and a model for other media companies. After acquiring the ABC television network in
1995, Disney finally became a fully diversified media corporation and was the most recognisable brand in the entertainment world (Kramer 2002).
Today, Disney furnishes our TV programs, movies, videos,

Characteristics Of An Oligopoly
It's called an oligopoly. It's not a regular market... It's a market in which they control the prices and they've been doing it for years.
Richard Miller
The quote above explains the characteristics of an oligopoly in comparison to other market structures. Miller suggests the nature of the market is
uncommon and that prices are rigid.
The hypothesis mentioned in the introduction supports this assumption on the real estate market in Hanoi. However, it can be questioned whether the
real estate market is an oligopoly.
2.1Market structure
In economics, a market structure refers to the characteristics of a market that influence the behavior of firms within an industry. These include number
of firms, market power, level and forms of competition, ... Show more content on Helpwriting.net ...
In oligopoly, industries are dominated by a small number of large firms, though in any one industry the firms are likely to vary in size. The
concentration ratios of these firms tend to be fairly high. This means that, for example, the largest four firms in the industry accounts for 70% of the
market share. The implication of this is that firms in oligopoly are interdependent. The actions of one firm will directly affect the others. Each of the
large firms in the industry has to try and predict the actions of the others. They may collude to avoid this.
2.2.3High barriers to entry/exit
Barriers to entry are high. Oligopolies often maintain their position of dominance in a market because other potential rivals are unable to enter the
industry. The hurdles that prevent other firms from entering the industry are called barriers to entry. These barriers could include government licenses,
economies of scale, patents and access to technology. In addition, many established oligopolies spend enormous sums on product differentiation and
advertising, making it difficult for new firms to match such expenditures. High barriers to entry allow firms to make economic profits in the long–run.
2.2.4Mutual

Monopolistic and Oligopoly Market Structures
1.Introduction – Market structures and cases under study
Definition – The interconnected characteristics of a market, such as the number and relative strength of buyers and sellers and degree of collusion
among them, level and forms of competition, extent of product differentiation, and ease of entry into and exit from the market.
Market structures under study are ones which are more pronounced than others in the real world i.e. 'Monopolistic competition' and 'Oligopoly'.
Very few markets in real world can be classified as perfectly competitive or as a puremonopoly. The vast majority of firms do compete with other
firms, often quite aggressively, and yet they are not price takers: they do have some degree of market
power. ... Show more content on Helpwriting.net ...
Key characteristics of Oligopoly are:
п‚§An oligopoly maximizes profits by producing where marginal revenue equals marginal costs.
п‚§Ability to set price: Oligopolies are price setters rather than price takers.
п‚§Barriers to entry are high.
п‚§Number of firms: "Few" – a "handful" of sellers.
п‚§Long run profits: Oligopolies can retain long run abnormal profits.
п‚§Product differentiation: Product may be homogeneous (steel) or differentiated (automobiles).
п‚§Perfect knowledge: Oligopolies have perfect knowledge of their own cost and demand functions but their inter–firm information may be incomplete.
п‚§Interdependence: Each firm keeps a close eye on the activities of other firms in the industry. Decisions made by one firm invariably affect others.
There is a tension between cooperation and self–interest among players.
4.Objectives of the study
п‚§Application of the theoretical understanding vis–Г –vis real world markets and draw logical conclusions.
п‚§Game theoretic analysis of Oligopoly.
п‚§
п‚§

5.Assumptions and limitations
Indian curry in UK
п‚§Study takes into account restaurants which are specialized and only serve Indian curry usually competing in local markets.
п‚§Study does not take into account premium hotels.
AT&T in US
6.Indian curry industry in UK – Introduction
The eating–out sector i.e. takeaways and restaurants is a vibrant market in the UK, with sales of some ВЈ28 billion. Although the

Game Theory and Oligopoly Fall
Econ 101: Principles of Microeconomics
Chapter 15 – Oligopoly
Fall 2010
Herriges (ISU)
Ch. 15 Oligopoly
Fall 2010
1 / 25
Outline
1
Understanding Oligopolies
2
Game Theory The Prisoner's Dilemma Overcoming the Prisoner's Dilemma
3
Antitrust Policy

Herriges (ISU)
Ch. 15 Oligopoly
Fall 2010
2 / 25
The Oligopoly
Monopolies are quiet rare, in part due to regulatory eп¬Ђorts to discourage them. However, there are many markets that are dominated by a relatively
few п¬Ѓrms, known as oligopolies. The term oligopoly comes from two Greek words: oligoi meaning "few" and poleein meaning "to sell". Examples
of oligopolies include:
1 2 3 4
5
6 7
Airliner Manufacturing: Boeing and Airbus Food ... Show more content on Helpwriting.net ...
Eп¬Ђorts to model such strategic interactions has led to a whole branch of economics and math known as game theory
Herriges (ISU)
Ch. 15 Oligopoly
Fall 2010
8 / 25
The Duopoly
In order to understand some of the possible behaviors in the case of oligopolies, consider the simplest case – the duopoly (i.e., two п¬Ѓrms). Think, for
example, of the airliner industry, which is dominated by two п¬Ѓrms (Boeing and Airbus). Suppose that the demand for airliners in any given month is
given by

Price ($mill.) 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0
Herriges (ISU)
Quantity Demanded 0 1 2 3 4 5 6 7 8
Total Revenue TR = P Г— Q 0 3.50 6.00 7.50 8.00 7.50 6.00 3.50 0
Ch. 15 Oligopoly
Marginal Revenue MR = в€†TR/в€†Q 3.50 2.50 1.50 0.50
–0.50 –1.50 –2.50 –3.50
Fall 2010 9 / 25
If MC=1.75, how much would a monopoly produce? Q=2
The Collusion Outcome
One alternative in the case of a duopoly would be for the two п¬Ѓrms to form a cartel A cartel is an agreement among several producers to obey output
restrictions in order to increase their joint proп¬Ѓt. Essentially, the cartel acts like a monopolist and simply divides the market among members of the
cartel. The most famous example of this is the Organization of Petroleum Exporting Countries (OPEC) OPEC was formed in 1960's in response to
quotas instituted by President

The Types Of Market, Monopolistic Competition, Oligopoly,...
The assignment for this week was to review the video which discusses the four types of markets: perfect competition, monopolistic competition,
oligopoly, and monopoly. In order to review this effectively there must be an understanding of the terms. According to our text, perfect competition
involves products competing clients and that they offer corporations less potential profits than imperfectly competitive markets do. (Bryd, Hickman
and McPheson, ) The text also referenced imperfect competition and this is when entry is restricted or goods are differentiated. (Bryd, Hickman and
McPheson, ) Monopolistic competition, oligopoly, and monopoly according to research are deemed as imperfect competition. Monopolistic
competition is considered imperfect because there are a lot of producers sell products that are distinquished from each other and there are not feasible
substitutes. The oligopoly is a when there are many small companied that take up a large part of the market share. It is close to a monopoly but it is
more than one company. A monopoly is normally one company that controls almost all of the market.
In reviewing the video the object of this paper is to identify at least two articles that highlight and discuss two of the biggest challenges facing financial
managers today in these varied market structures. The two challenges reviewed were the ability to staying in tune with market and cash flow and
financial management.
Due to the ever changing market

Oligopoly Assignment
Name of the student : Dinesh racharla Student Id : kac3159 Individual Assignment 1
Table of Contents
Introduction2
Discussion2
Types of market2
Perfect competition2
Monopoly3
Oligopoly3
Duopoly3
Rising Capital ... Show more content on Helpwriting.net ...
(Eds.). (2013). Environmental policy and market structure (Vol. 4). Springer Science & Business Media.
Cowling, K., & Tomlinson, P. (2012).Monopoly capitalism. Oxford University Press.
Dunne, T., Klimek, S. D., Roberts, M. J., & Xu, D. Y. (2013). Entry, exit, and the determinants of market structure. The RAND Journal ofEconomics,
44(3), 462–487.
Elfenbein, D., Fisman, R., & McManus, B. (2014).
Market Structure: Meaning, Characteristics and Forms | Economics. (2014). YourArticleLibrary.com: The Next Generation Library. Retrieved 25 April
2016, from http://www.yourarticlelibrary.com/economics/market/market–structure–meaning–characteristics–and–forms–economics/28736/
Perfect Competition, the Profit Criterion, and the Organiza–tion of Economic Activity
Ramli, D. (2015). Optus chief predicts telecommunications duopoly with Telstra. The Sydney Morning Herald. Retrieved 25 April 2016, from http:/
/www.smh.com.au/business/australias–phone–and–internet–market–could–become–duopoly–says–optus–chief–20150604–ghgm5b.html
Wang, X. H., & Zeng, C. (2014). A Note on Endogenous Heterogeneity in a Duopoly (No. 2015
–02). School of Economics, Shandong

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