Why Vienna is headquater of OPEC?
Vienna serves as the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) primarily due to its strategic location and historical significance as a center for international diplomacy. The city offers a neutral ground for member countries to convene and negotiate, fostering a collaborative environment. Additionally, Austria's long-standing commitment to neutrality and its established infrastructure for hosting international organizations make it an ideal choice for OPEC's operations.
Is sasol an oligopoly monopoly?
Sasol operates in an oligopoly within the energy and chemicals sector, particularly in South Africa. This is characterized by a few large firms dominating the market, leading to limited competition. While Sasol has significant market power due to its size and resources, it does not operate as a monopoly because there are other competitors in the industry. Thus, it influences prices and market dynamics but does not have complete control.
What does regulation by oligopoly do?
Oh, dude, regulation by oligopoly is like when a small group of big players in an industry get together and decide, "Hey, let's not step on each other's toes too much." It's like a little club where they set the rules to keep out the pesky competition. So, basically, it's like monopoly but with a few more players in the game.
How oligopoly affect the efficiency of resources allocation compared to a competition market?
Oligopolies and competitive markets allocate resources differently, affecting economic efficiency in several ways. Here’s a detailed comparison:
Resource Allocation in Competitive Markets
Price Mechanism: In a perfectly competitive market, prices are determined by supply and demand. Firms are price takers and must accept the market price.
Efficiency:
Allocative Efficiency: Resources are allocated where they are most valued by consumers, as prices reflect the marginal cost of production.
Productive Efficiency: Firms produce at the lowest point on their average cost curve due to competitive pressures.
Consumer Welfare: Consumers benefit from lower prices and a wide variety of goods and services due to intense competition.
Resource Allocation in Oligopolies
Price Setting: In an oligopoly, a few large firms dominate the market. These firms have significant control over prices and can influence market conditions.
Efficiency:
Allocative Efficiency: Often compromised because firms have the power to set prices above marginal cost, leading to higher prices and reduced output compared to a competitive market.
Productive Efficiency: May be less efficient than in competitive markets due to less pressure to minimize costs. However, large firms may benefit from economies of scale, which can improve productive efficiency.
Consumer Welfare: Typically lower compared to competitive markets because higher prices and limited choices reduce consumer surplus.
Key Differences
Market Power:
In competitive markets, firms have little to no market power, leading to optimal pricing and output decisions.
In oligopolies, firms have significant market power, which can lead to higher prices and reduced output.
Barriers to Entry:
Competitive markets have low barriers to entry, encouraging new firms to enter and drive innovation and efficiency.
Oligopolies often have high barriers to entry, reducing competition and potentially leading to inefficiencies.
Innovation:
Competitive markets drive innovation as firms constantly strive to outperform their rivals.
Oligopolies might have more resources for R&D, potentially leading to significant innovations. However, the lack of competitive pressure can sometimes lead to complacency.
Theoretical Perspectives
Cournot Model: Assumes firms compete on quantity. Oligopolies produce more than a monopoly but less than a competitive market, leading to higher prices than in perfect competition.
Bertrand Model: Assumes firms compete on price. If firms set prices, it can lead to a situation akin to perfect competition with low prices, but this depends on the assumption of identical products and no capacity constraints.
Kinked Demand Curve: Suggests that firms in oligopolies are hesitant to change prices due to potential competitive reactions, leading to price rigidity.
Empirical Evidence
Studies have shown that oligopolistic markets often exhibit higher prices and lower output than competitive markets, supporting the theoretical predictions of reduced allocative efficiency. For example, the airline industry, characterized by a few dominant carriers, often shows higher prices on routes with less competition.
Conclusion
Overall, oligopolies tend to be less efficient in resource allocation compared to competitive markets. They can lead to higher prices, reduced output, and potentially lower levels of innovation and consumer welfare. However, the potential for economies of scale and significant R&D investments in oligopolies can sometimes offset these inefficiencies to some extent.
For a more in-depth analysis, references from economic textbooks and empirical studies such as those found in journals like the Journal of Economic Perspectives or The Quarterly Journal of Economics can provide further insights.
Is digital camera makers pure competition or oligopoly?
No. Depending on how you count them, there are at least a half-dozen to a dozen manufacturers of digital cameras (Canon, Nikon, Olympus, Sony, Samsung, Panasonic, Pentax, maybe HP, Casio, Leica, Ricoh, Fuji). Include mobile phone makers like Apple that have taken a big chunk of from the point-and-shoot makers (RIP Kodak, Minolta, Yashica, Konika) and there are too many players for an oligopoly. The number hasn't changed that much in the past 20-30 years.
Types of profits in the long run in oligopoly?
Supernormal profits due to high barriers to entry. Profits in the long run are determined by the barriers to entry. If there is high barriers to entry, new firms cannot enter the industry easily and hence cannot competed with existing firms for profits. Existing firms would be able to enjoy supernormal profits. On the contrary, weak barriers to entry means that the long run profits would be competed away by new firms entering the industry, hence firms would earn normal profits. Oligopoly market is characterised by high barriers to entry, largely due to non-price competition such as branding, advertising, etc. High barriers could also be due to economies of scale and high fixed cost.
No and Yes. All professional sports, with the exception of baseball, are required to abide by all applicable anti-trust laws. Baseball (based on the 1972 US Supreme Court decision - please see http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=407&invol=258 for the full case) confirms a prior ruling that baseball is more of a game than a business and therefore anti-trust laws do not apply. Hope that helps!
How would OPEC nation feel about the rising cost of petroleum?
OPEC would never trade with the country that rose the price of petroleum.
When is Economists usually call an industry an oligopoly?
the four largest firms produce at least 70 to 80 % of the output
Price and output determination under oligopoly?
Explain how price and output decision are taken under conditions of oligopoly.
Which is the largest oil producing country in the OPEC?
The largest oil producing country is arabia.all the south west countries are famous for this purpose.But the iran,iraq,oman are also very famous.the most largest one is soud-i-arabia.here about 250 meter well of oil is present.from this well the pipe line system has made between the amrica and other europien countries.
THIS PARAGRAPH HAS GIVEN BY FARIDA REHNAN.
Is online auctioning oligopoly?
Online auctioning is an example of Pure Competition.
Here are some examples of the others:
Monopoly - Sewer Service
Monopolistic Competition - Video Rental
Oligopoly - Digital Cameras
What is a key feature of an oligopoly?
An oligopoly is market form in which a market is dominated by a small number of sellers (oligopolists). The word is derived from the Greek for few sellers. Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. Oligopolistic markets are characterised by interactivity. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolists always involves taking into account the likely responses of the other market participants. An oligopy is a form of economy. As a quantitative description of oligopoly, the four-firm concentration ratio is often utilized. This measure expresses the market share of the four largest firms in an industry as a percentage. Using this measure, an oligopoly is defined as a market in which the four-firm concentration ratio is above 40%. An example would be Indian mobile industry , with a four-firm concentration ratio of over 70% and the cold drink industry also in the U.S.A has a two firm concentration ratio of a staggering 85%.
In an oligopoly, firms operate under imperfect competition, the demand curve is kinked to reflect inelasticity below market price and elasticity above market price, the product or service firms offer are differentiated and barriers to entry are strong. Following from the fierce price competitiveness created by this sticky-upward demand curve, firms utilize non-price competition in order to accrue greater revenue and market share.
In industrialized countries oligopolies are found in many sectors of the economy, such as cars, consumer goods, and steel production. Unprecedented levels of competition, fueled by increasing globalisation, have resulted in the emergence of oligopsony in many market sectors, such as the aerospace industry. There are now only a small number of manufacturers of civil passenger aircraft. A further instance arises in a heavily regulated market such as wireless communications. Typically the state will license only two or three providers of cellular phone services.
Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may collude to raise prices and restrict production in the same way as a monopoly. Where there is a formal agreement for such collusion, this is known as a cartel. Firms often collude in an attempt to stabilise unstable markets, so as to reduce the risks inherent in these markets for investment and product development. There are legal restrictions on such collusion in most countries. There does not have to be a formal agreement for collusion to take place (although for the act to be illegal there must be a real communication between companies) - for example, in some industries, there may be an acknowledged market leader which informally sets prices to which other producers respond, known as price leadership.
Were patents and copyrights established by the government to reduce oligopoly and monopoly power?
No patents and copyrights were established by government to increase oligopoly and monopoly power.