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Oligopoly
An oligopoly is a market dominated by a few large suppliers. The degree of market concentration is very high, firms within an oligopoly produce branded products and there are also barriers to entry. There are collusive and non-collusive oligopolies.
327 Questions
It is least likely to be in pure competition.
Tenaga Nasional Berhad is an example of monopoly. It is the largest Electric utility company in Malaysia and also the largest power company in Southeast Asia. Only one supplier..
Oligopoly is a few firms that sell the similiar product. For example, communication services have celcom, maxis, and digi. they give a similiar service to us and they are compete among of them in prices, services, promotions, etc..
Why is McDonald's an oligopoly?
Because of their availability and selection. McDonald's has thousands of locations around the world and appeals to a wide range of people.
In what type of market must market price always be equal to marginal cost?
Under perfect competition, since there is no room in perfect competition to earn any abnormal profits
What role did Wales play in World War 1?
Many welsh men joined the army in ww1. Because many men worked in the mines they wanted these men to be in the trench because they were familiar with the wet, cold and dark climate.
Many people say that the Welsh were mainly in the front line because the English didn't want their own men dieing. I don't know if this is true or not. Look it up :)
Is monolistic competition closer to perfect competition?
Yes, although there are differences. One difference between monopolistic competition and perfect competition is the type of product. Perfect competition means that firms sell identical (or homogeneous) products. Firms in a monopolistically competitive industry sell products that are slightly different. Product differentiation may be based on product quality, customer support, variety, flavor, or other aspects of the product that matter to consumers. In both market structures, there are many buyers and sellers, perfect information, and free entry and exit. Also, economic profit is zero in long-run equilibrium, although only perfect competition results in an efficient outcome with minimum average total cost and marginal benefit equal to marginal cost. The other two market models, monopoly and oligopoly, both involve industries dominated by a single firm or only a few firms and there are probably barriers that prevent new firms from entering the industry to drive down profits.
Bilateral Oligopoly is a market structure in which a few sellers and a few buyers exist and both demand and supply sides have market power. There is no absolute equilibrium defined for such structure. the example is the intermediate goods market that is a few suppliers compete each other to sell and a few buyers compete to buy. collusion may happen on both sides.
What is the Opposite of oligopoly?
The opposite of oligopoly (where there are few sellers in a market), is a market in which there are only a few large buyers for a product or service. This is called a Oligopsony and usually allows the buyers to exert a great deal of control over the sellers, often resulting in the depression of prices.
Examples would be world commodity markets in agricultural crops such as coffee were a few international intermediaries are able to trade the multitude of producers off against one another in order to extract cheap resources.
What are characteristics of oligopoly?
An oligopoly is characterized by a market with a few firms having a negligible effect on price.
Why does differentiating its product allow an oligopoly to charge a higher price?
Prevents new firms from entering the industry
Why do oligopolies avoid price competition?
Kinked Demand Curve Theory:
It shows why prices in oligopolistic markets tend to remain stable, and why price competition creates price wars so firms compete on non-price factors instead.
Price is at P on the graph. If one firm raised their price, other firms will lower there price and capture market share from the firm that initially raised its price. This is because more consumers are likely to buy from the firms with a low price rather than high price. So a rise in price results in a bigger fall in demand - ELASTIC demand. This means LOWER REVENUES for the firm that raised prices.
If one firm lowered their price, because of interdependence, other oligopolies will also lower their price so as not lose their market share. Therefore firms will be competing on price which means all firms' revenues will be lowered. A decrease in price creates a smaller increased in demand - INELASTIC demand.
Therefore, by lowering/raising firms will lose out either way, Therefore, in order to avoid price wars prices remain stable and firms use non-price competition (or firms may collude to create monopoly power).
No, because of two reasons.
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists).
BP is not a market form, but a global oil company.
And BP is certainly not small.
When OPEC refused to sell America oil Nixon responded by?
He sent Henry Kissinger to negotiate a deal.
What are the roles of quota in oligopoly?
inperfect oligopoly is a market the very few suuliers of aparticular item. if there is a quuta system in operation it means the few companies can not produce more than the quota; in so doing they are restricting supplies to the market thereby maintaining the desires amount on the market.
a pure oligopoly is when few producers dominate the production of on item
What are the Structures of collusive oligopoly with diagrams?
Collusive oligopoly occurs when firms in an oligopoly collaborate to set prices or output levels to maximize joint profits, rather than competing against each other. Common structures include cartels, where firms formally agree on prices and production quotas, and price leadership, where one firm sets a price that others follow. Diagrams typically illustrate demand and cost curves, showing the equilibrium at higher prices and lower outputs compared to competitive markets. The key feature is the reduced competition leading to increased profits for the colluding firms.
