An oligopoly market structure can be differentiated from others because it has distinct features such as competition among a few firms, high concentration ratio and barriers to entry, non price competition, differentiated products and high level of interdependence between firms. The report also outlines and describes why the UK detergent industry which is dominated by a few firms reflects the model of an oligopoly. Several real life examples have been used to confirm the theory of oligopoly. Moreover
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In competitive markets there are many buyers and sellers in the market and the goods that are offered mostly the same. Because there are many buyers and sellers that offer the same good there competitive markets have no real impact on market prices. Buyers and sellers can increase their selling price, but consumers will go somewhere else to get the good cheaper. This happens when there are many companies that sell the same product. Maximizing profits would have to come internally, selling more product
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such that no participants are large enough to have the market power to set the price of a homogeneous product. Demand and Supply In a perfectly competitive market, a firm's demand curve is perfectly elastic. [pic] Demand and supply in oligopoly The two that are most frequently discussed, however, are the kinked-demand theory and the cartel theory. The kinked-demand theory is illustrated in Figure and applies to oligopolistic markets where each firm sells a differentiated product. According
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Disadvantages 1. Exploitation of consumers- a monopoly market is best known for consumer exploitation. There are indeed no competing products and as a result the consumer gets a raw deal in terms of quantity, quality and pricing. The firm may find it easy to produce inferior or substandard goods if it wishes because t the end of the day they know very well that the items will be purchased as there are no competing products for the already available market. 2. Dissatisfied consumers- consumers get
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and seller of a product and there would be no close substitutes. A example of this would be say Microsoft with Windows or Apple with the MAC. Now we can look at the oligopoly is basically a market in which there are only a few sellers , each whom offer similar or sometimes identical to other firms. A few characteristics of a oligopoly are to start interdependent firms so this could be like companies who buy product from one another in order to produce their own goods. Again there are fewer sellers
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but higher prices than perfect comeptition. We will get variety, but must pay for to get it. Besides advertising, we should expect give-aways, coupons, warranties, etc. Oligopoly 1. Few sellers 2. Same basic product, but much product differentiation. 3. Firms must price strategically 4. Difficult entry Oligopoly firms behave strategically: They consider not only the response of consumers to their actions, but also the response of other rival firms in the industry. Game Theory:
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the competition and thus removed them entirely to make sure that only they could provide the service this would also give them the choice of whatever price they wanted if they so choose. 3. Given your research and findings, are monopolies and oligopolies (firms demonstrating power) always bad for society? Be sure to provide real world examples of where this may be the case to strengthen your position. Some bad things about monopolies are for the consumer and for society. Things along the lines
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than ever since back then they just conquered Smart and somewhat recently, there is Sun Cellular. OLIGOPOLY 1. Malls Ex. SM, Ayala, Robinsons 2. Cement industry Ex. Lafarge, Cemex, Holcim 3. Drugstores Ex. Mercury Drugstore, Watsons, South Star Drug Oligopoly is defined as a competition with few companies controlling the market. These firms that are into the oligopoly competition are such big names. These businesses can actually name and control their price. Undeniably
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several competitive firms in the industry. Of these firms, Pinnacle is the second largest and most powerful company in the industry in sales and service. Four basic structure models are: perfect competition, monopoly, monopolistic competition, and oligopoly. Perfect competition is theoretical. A perfect competition is often used as a benchmark and compared to real structures. This is a model that is traded freely by buyers and sellers usually in large numbers and there are no individual transactions
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structures and their characteristics? According to McConnell and Brue (2004) describe four market structures that companies align themselves with during the course of their corporate lives.: “Pure Competition, Pure Monopoly, Monopolistic Competition and Oligopoly. Companies may move from market structure to market structure over the course of growth and time. This movement between structures may be the result of product changes, introduction of competition or consumer interests. McConnell and Brue (2004)
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