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In the short run, firms in an oligopoly can earn significant profits due to limited competition and the ability to set prices above marginal costs, often resulting from collusion or strategic behavior. However, in the long run, the potential for new entrants and market adjustments can erode these profits, leading to a more competitive environment. Firms may engage in non-price competition, such as advertising and product differentiation, to maintain market share. Ultimately, while short-run profits may be high, the long-run equilibrium often leads to more stable prices and profits.
What else can I help you with?
What are the characteristics of an oligopoly?
There are three main characteristics of oligopoly. They are industry dominated by a small number of large firms, the firms sell identical or similar products, and the industry has significant barriers to enter.
In what market structures is it possible for Firms to make positive profit in the long run?
Monopoly and Oligopoly are both the only firms that may make positive profit in the long run. Under LONG-RUN MARKET TENDENCY OF PRICE AND ATC: Monopoly P>ATC and Oligopoly P>ATC both will have postive profits, however it possible to turn to zero profits if there isn't capitalization of the profits or any rent-seeking activities or if the market is contestable. But moreover, the answer you're looking for is the above that bother Monopoly and Oligopoly will have positive profit in the long run.
Is monetary policy neutral in both the short run and the long run?
Monetary policy is not neutral in the short-run but neutral in the long-run. Besides, fiscal policy is not neutral in both short-run and long-run.
How oligopoly originate?
Generally, collusion occurs when participating firms can increase their short-run economic profits by controlling supply, acting like a monopoly.
Why are firms willing to accept economic losses in the short run but not the long run?
There are sunk cost in the short run but not in long run.
What are the characteristics of an oligopoly?
There are three main characteristics of oligopoly. They are industry dominated by a small number of large firms, the firms sell identical or similar products, and the industry has significant barriers to enter.
In what market structures is it possible for Firms to make positive profit in the long run?
Monopoly and Oligopoly are both the only firms that may make positive profit in the long run. Under LONG-RUN MARKET TENDENCY OF PRICE AND ATC: Monopoly P>ATC and Oligopoly P>ATC both will have postive profits, however it possible to turn to zero profits if there isn't capitalization of the profits or any rent-seeking activities or if the market is contestable. But moreover, the answer you're looking for is the above that bother Monopoly and Oligopoly will have positive profit in the long run.
Is monetary policy neutral in both the short run and the long run?
Monetary policy is not neutral in the short-run but neutral in the long-run. Besides, fiscal policy is not neutral in both short-run and long-run.
How oligopoly originate?
Generally, collusion occurs when participating firms can increase their short-run economic profits by controlling supply, acting like a monopoly.
Which energy resource is cheaper in the short run In the long run?
Well in the short run, it is sunlight. In the long run, it is clean energy.:)
Which energy resources is cheaper in the short run In the long run?
Well in the short run, it is sunlight. In the long run, it is clean energy.:)
Why are firms willing to accept economic losses in the short run but not the long run?
There are sunk cost in the short run but not in long run.
Is the decision to shutdown made in the short run or long run?
It is made in the short run
Is the price elasticity of supply usually larger in the short run or in the long run?
long run is ever smaller than short run
What is Short run and long run price elasticity of demand?
is the long run elasticity of demand is ever smaller than the short run elasticity of demand.
Distinguish between the concept of the short run and long run period theory of the firm?
Explain which of the following would be considered the long-run and short-run and why.
Is a firm's demand for labor curve is more elastic in the short run than in the long run?
No. It's more elastic in the long run than the short run.
