Oligopoly (Economics) 1) Main assumptions of Oligopoly 2) Price stability in Oligopoly.

1) Oligopoly is when a particular market is controlled by a weakened group of firms. For eccentric supermarkets, there be three (there normally exist three companies) companies which dominate the market, Wong and Metro, Santa Isabel and Plaza Vea, and Tottus.

The main assumptions that economists endure when talking about a situation of Oligopoly atomic reduce 18 assorted; three or four prodigious companies dominate the industry, however small companies do exist (smaller companies in the recent example would be for example Arakaki, a restore trader company); firms are interdependent, al will watch what the competitors do and act wherefore (when Wong created the tribute card, it did not even passed a week when Santa Isabel created the Más Más card); the populace of the kinked demand curl (which we will see what it is on head teacher b); there are barriers to entry, this means it is difficult for other firms to degrade the industry; non expense competition, as companies cannot contest by prices, wherefore they have to compete with the service they offer (for example the Bonus and the Más Más cards); the oligopoly must be collusive (collusion), this means when the companies, which dominate, work together to champion very high prices at the expense of the consumer (for example Umbro and Adidas, sell football shirts at very high prices, as a Manchester united shirt be approximately $50), companies which work together to maintain high prices should be fined, as it is illegal. Advertising is besides intrinsic to maintain a high profit and market share, and also something very important, which is to bourgeon make! loyalty (for example, once I began to buy Sony electro domestics, I begin to have a brand loyalty, as I never had a single line of work with them). 2) The causes of price constancy (when prices are stable, If you want to get a full essay, come in it on our website: BestEssayCheap.com

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