• By porcasdumraio
• 2022-05-132023-06-20
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There are only a few firms in the market which makes consumer able to compare the prices of different firms. Due to this reason, firms make sure to keep their prices low as much as possible. In order to avoid regular competition in the market, all firms keep their prices fixed, which results to price rigidity. Due to less number of sellers in the market, the competition gets more intense; and, because of intense competition in the market decision of one firm affects the entire industry. Which makes the firms to keep in check with other firms activities and behaviour. In order to finish the price-cutting competition sellers comes to an agreement.

So, firms prefer non- price competition instead of price competition. If firms in an oligopoly market compete with each other, it is called a non-collusive or non-cooperative oligopoly. If the firms cooperate with each other in determining price or output or both, it is called collusive oligopoly or cooperative oligopoly. The largest of them is Service Corporation International, with nearly 11% market share by the number of funeral homes and 16% market share by revenue.

Are Coca-Cola, Netflix, or Nike an Oligopoly?

Though, it is rare to find pure oligopoly situation, yet, cement, steel, aluminum and chemicals producing industries approach pure oligopoly. The gap in the marginal revenue curve means that marginal costs can fluctuate without changing equilibrium price and quantity,[66] thus, prices tend to be rigid. The barriers to enter into an oligopoly market have been discussed previously, but it is also a fundamental source of an oligopoly’s power. Regarding the pricing decision Mukherjee (2002, p. 449) stated that “in differentiated oligopoly, to some extent the specific pricing pattern that evolves over time will depend on the degree of product differentiation that exists”.

When the quantity at which the customers are willing to buy decreases, then the price and output quantity of their services will also decrease (Keat, Young, & Erfle, 2014). The products sold in an oligopoly may be homogeneous or differentiated. If the product is homogeneous (same), the market is said to be pure oligopoly. If the product is differentiated, the market is a differentiated oligopoly. The automobile and television industries are examples of differentiated oligopolies. There must be some factor which prevents new firms from entering the industry.

Best Examples Of Oligopoly In 2023

Air transportation is a thriving industry, taking millions of people to locations around the globe. Between 2009 and 2019, the global aviation industry’s revenue grew at a CAGR of 5.3%, reaching $838 billion in 2019. As of 2019, Ford Motor Company, Toyota Motor Corporation, and General Motors were the top three US car brands with a combined sale of more than 5.2 million units.

• Any change in price by one firm may lead to change in prices by the competing firms.
• Differentiated or imperfect oligopoly market refers to the market which is having different products.
• It is a theoretical model and is useful for looking at industries with similar traits, so it works as a reference point for other market structures.
• Hence, the interdependence among sellers decreases in the case of a differentiated oligopoly market.

The meaning of oligopoly is a market where several companies or sellers keep certain homogeneous products or differentiated products captive. In other words, an oligopoly is a state of the market where the industry has a few types of products or a few firms that dominate the oligopoly examples in india market, or industry. This affects the parameters of the market, which includes costing. An individual firm can decide the cost of their products, and this decision affects the entire market. In an oligopoly, every individual firm has control over the market and its prices.

Prompts About Oligopoly Competition:

Price leader decides the price in the market and other firms have to accept the price. Sellers in an oligopoly are dependent on each other because the decision of one firm affects the entire industry. Change in prices of one firm compiles other firms to do the same to keep their market share. Few sellers and many consumers are the reflections of an oligopoly market.

The other two companies are Stonemor Partners LP (focuses on cremation) and Carriage Services Inc (focuses on burial). Each has a 1% market share by the number of funeral homes and a 2% market share by revenue. With a small group of firms, every oligopolist is aware of the actions of others. Decisions made by one company impact the decisions of its competitors and vice versa. While a monopoly consists of only one company dominating a certain industry, an oligopoly contains two or more corporations having significant influence over the specific market. Apple is one of the most successful consumer electronics corporations in the world.

Oligopoly Characteristics

However, as per managerial economic the determinants can be of two types; non-price determinants, and price-based determinants. The non-price-based determinates will include, seasonality, demand of the products, supply of services, consumer behavior, future expectations, market risk, and the goals and marketing strategy of each telecom company. Whereas, the price-based determinants would include; cost of services provided by the companies, price elasticity of demand, market equilibrium, and price, packages and discounts offered by the competitors. An oligopoly (from Ancient Greek ὀλίγος (olígos) ‘few’, and πωλέω (pōléō) ‘to sell’) is a market in which control over an industry lies in the hands of a few large sellers who own a dominant share of the market.

The production of their flagship iPhone has been the pillar of their past and current success. As a result, it has been an economic focus because of its success and its popularity. As such, it comes under the influence of many economic factors, not only microeconomic factors but also macroeconomic factors. This paper will discuss some of these factors and the impact they have on Apple and…