oligopoly definition characteristics kinked demand curve model collusion and why such agreements argon unstable welf atomic number 18 and benefit to confederacy toll stickiness MARKET STRUCTURES: Oligopoly: Definition: InÂ an oligopoly, there are only a few warms that throw off up an constancy. This select group of firmsÂ has temper over the price and, equal a monopoly, an oligopoly has high barriers to entry. The products that the oligopolistic firms produceÂ are frequentlyÂ about identical and, therefore, the companies, which are competing for market share, are mutually ripe as a result of market forces. Assume, for example, that an economy contend only 100 wid comes. accompany X produces 50 widgetsÂ and its competitor, refreshful set Y, produces the new(prenominal)(a) 50. The prices of the two brands give be interdependent and, therefore, similar. So, if blighter X starts selling the widgets at a lower price, it go forth get a greater market sh are, thereby forcing follow Y to lower its prices as well. Oligopolistic industries are nonhing if not diverse. few sell identical products,others differentiated products. Some be possess of three or four firms of nearly equal size,others get around in one large dominate firm (a cause industry leader) and a handful of smallers firms (that folloas the leader).
Some sell negotiate goods to other producers and others sell consumer good directly to the public. However,through this diversity ,all oligopolistic industries aim in similar types of behaviour. The most noted behaviour tendencies are: (1)Interdependent deci siveness making, (2) relatively constant pri! ce,(3)competition in ways that do not involve prices,(4)the legal merger of two or to a greater extent firms and (5) the illegal collusion among firms to control price and production. Interdependence. Each firm is an olgopolistic industry keeps a crocked eye on the activities of other firms in the industry. Because oligopolistic firms engage in competition among the few,decisions made by one firm eer affect others. Competitions among...If you want to get a full essay, smart set it on our website: OrderCustomPaper.com
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