This website uses cookies to ensure you have the best experience. Learn more

Oligopoly Vs Monopoly Essay

705 words - 3 pages

OLIGOPOLY, CHARACTERISTICS:

The three most important characteristics of oligopoly are: (1) an industry dominated by a small number of large firms, (2) firms sell either identical or differentiated products, and (3) the industry has significant barriers to entry.
These three characteristics underlie common oligopolistic behavior, including interdependent actions and decision making, the inclination to keep prices rigid, the pursuit of nonprice competition rather than price competition, the tendency for firms to merge, and the incentive to form collusive arrangements.
Small Number of Large Firms

The most important characteristic of oligopoly is an industry dominated by a small number ...view middle of the document...

This characteristic might seem to be a bit wishy-washy, taking both sides of product differentiation issue. In actuality it points out that oligopolistic industries general come in two varieties.
Identical Product Oligopoly: This type of oligopoly tends to process raw materials or produce intermediate goods that are used as inputs by other industries. Notable examples are petroleum, steel, and aluminum.

Differentiate Product Oligopoly: This type of oligopoly tends to focus on goods sold for personal consumption. The key is that people have different wants and needs and thus enjoy variety. A few examples of differentiated oligopolistic industries include automobiles, household detergents, and computers.
Barriers to Entry

Firms in an oligopolistic industry attain and retain market control through barriers to entry. The most noted entry barriers are: (1) exclusive resource ownership, (2) patents and copyrights, (3) other government restrictions, and (4) high start-up cost.
Barriers to entry are the key characteristic that separates oligopoly from monopolistic competition on the continuum of market structures. With few if any barriers to entry, firms can enter a monopolistically competitive industry when existing firms receive economic profit. This diminishes the market control of any...

Other Papers Like Oligopoly vs Monopoly

Ecn101 Essay

3990 words - 16 pages profit Short run profit maximization Long run profit maximization Economics to scale 5. Perfect competition Demand, revenue, cost and supply curves Equilibrium short and long term 6. Monopoly Revenue curves. Equilibrium output. Discriminating Monopoly. Barriers to entry. 7. Monopolistic Competition Imperfect competition. Downward sloping demand curve. Long run equilibrium 8. Oligopoly

Factors Affecting Food Choices Essay

806 words - 4 pages have no control over price The buyer will purchase from the lowest price source * Monopolistic competition-Has few to many sellers The product is seen as unique by some buyers, but not necessarily all A differentiated brand provides the firm with some control over pricing * Oligopoly-A few large suppliers dominate the market High barriers to entry The products are seen as similar; no supplier has an edge Each supplier knows what

Business Proposal

1150 words - 5 pages maximize profits. Hewlett Packard is an oligopoly so competition is limited. Entry barriers: As stated above, one example of a barrier to commercial entry is an existing company holding a patent on a new product or merchandise thereby giving said company a monopoly or sole proprietorship on this merchandise or technological advancement. Product cost minimization: One way of minimizing product cost is to develop manufacturing techniques

Business Proposal for Iphone

2466 words - 10 pages defined as the collection of factors that determine how buyers and sellers interact in a market, how prices change, and how different levels of the production and selling processes interact. The four basic market structures are Pure Competition, Monopoly, Monopolistic Competition and Oligopoly. The market structure that the Apple iPhone belongs to is Oligopoly. This is because a small number of firms control a large majority of the market

Industry Strategy

1484 words - 6 pages iii. The buyers iv. The suppliers v. The competitors 1. What is the market concentration? a. Perfect competition (fierce) b. Monopolistic competition (light) c. Oligopoly (inter-firm) d. Monopoly vi. The substitutes vii. The potential entrants g. Assess the underlying drivers of each competitive force to determine which

Marketing

2624 words - 11 pages What is the competitive nature of this market? Is it a monopoly? Oligopoly? Trends Analyse the macro environmental trends effecting this market place. Include only those issues that are relevant to your market. Consider the demographic, economic, natural, cultural, technological and political/ legal trends. 4. Competitors Consider both direct and indirect competitors in your analysis. Include information in your

Integrated Marketing Plan

5129 words - 21 pages Providers |A Provider | |Homogeneous |Full competition |Homogenous oligopoly |Monopoly | |Heterogeneous |Monopolistic competition |Heterogeneous oligopoly |Monopoly | Table A. 1 Kingsford were the product leader in a market of small number of providers (Royal Oak and Private label

Social Theories

3112 words - 13 pages Capitalism Criticisms of Capitalism [pic] Critics argue that capitalism is associated with: unfair and inefficient distribution of wealth and power; a tendency toward market monopoly or oligopoly (and government by oligarchy); imperialism, counter-revolutionary wars and various forms of economic and cultural exploitation; repressions of workers and trade unionists, and phenomena such as social alienation, inequality, unemployment, and economic

International Economies Theory

4241 words - 17 pages certain problems that we have avoided so far. Up to now we have assumed that markets are perfectly competitive, so that all monopoly profits are always competed away. When there are increasing returns, however, large firms may have an advantage over small ones, so that markets tend to be dominated by one firm (monopoly) or, more often, by a few firms (oligopoly). If this happens, our analysis of trade has to take into account the effects of imperfect

Freedom And Responsibility

2141 words - 9 pages Built within the Constitution of the United States are specifically defined freedoms that are guaranteed to all citizens. Conversely, with every constitutional freedom there comes a corresponding responsibility. On September 25, 1789, the state legislature’s twelve proposed amendments were transmitted by congress, the first two dealing with congressional representation and congressional pay. The following numbers three through twelve were

Hate Crime Laws

2348 words - 10 pages On June 7, 1998, 49-year-old James Byrd Jr. of Texas accepted a ride from three white men, who then beat him severely, urinated on him, chained him by his ankles to the back of their pick-up truck, dragged him for three miles into the countryside, and dumped his corpse in front of an African-American cemetery (Graczyk). A little over a year later, a jury sentenced ring leader John King to death by lethal injection (“Man Executed for Dragging

Related Essays

Ip Project Essay

958 words - 4 pages What is a monopoly? A monopoly is an enterprise that is the only seller of a good service. In the absence of government intervention, a monopoly is free to set any price it chooses and will usually set the price that yields the largest possible profit. (Stigler, 2013) What is an Oligopoly? Oligopoly is an industry can only have a handful of large firms; it makes it very difficult for new firms to enter into the industry. The firm products

Econ: Marketing Segments Essay

2914 words - 12 pages Market Structure and Pricing Strategies   Abstract In today’s economy there are four types of market structures which all firm activity falls. This paper introduces each of the four market structures; perfect competition, monopolistic competition, oligopoly and monopoly. It also highlights the pricing strategies for each, as this strategy is the most significant determinant of how firms will fare in terms of their respective market

Wal Mart Deriving Business Value From Sustainability Strategy

3022 words - 13 pages bottom and therefore, firms must find other means to compete within the same market. Prices in an oligopoly are normally more stable than prices in a monopoly situation because both firms are more likely to keep price “stable” in comparison to other competing factors. Airlines and car industries are examples of prices that are profitable and relatively set within the industry standard. They still continue to match prices, interest rates, or terms

Business Proposal Essay

1066 words - 5 pages the oligopoly market structure. The way they are acquiring and also buying out other companies and search engines, it would seem as if they are planning to end up as a monopoly. The Chromecast product also falls under the oligopoly market structure. As Belkin is the only other service provider to offer these functions via HDMI USB ports.      Depending on the amount of units sold would we be able to determine the elasticity of the Chromecast