No‚ monopolies and Oligopolies are not always bad. Consider an example of a natural monopoly that emerges out of increased sales and increased capacity hence enjoying economies of scale and a further decrease in unit cost that is passed to the consumer. Government monopolies
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structure of an oligopoly. An oligopoly is a market structure where there are a few dominant firms whose behavior is interdependent. There are a few dominant firms relative to market size‚ and they each command a large proportion of the market share‚ thus having strong monopoly power. Examples of petrol companies include Shell‚ Caltex and Exxon Mobil. Their demand curve is downward sloping‚ meaning that they are price setters. Petrol is a homogeneous product‚ hence the oligopoly is known to be
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– A monopoly is an economic market condition where one seller dominates the entire market. A monopoly occurs if a firm has 25% of the market shares. A natural monopoly can happen when it is most efficient for production e.g. Post office Oligopoly – An oligopoly is an economic market condition where numerous sellers have their presence in a single market. There is usually barriers to entry. There is also interdependence between firms so they are usually always competing and having to watch and respond
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with the most choices; and more often than not‚ Stanley Bostitch falls into second on the list by product count. This anecdotal evidence hints that collectively‚ Swingline and Stanley Bostitch may very well have a strong share of a crowded market; oligopoly or monopolistic competition – it could go either way. Page 2 In terms of establishing the price for its heavy duty stapler‚ it is important to Swingline to price it reasonably close to its many substitutes. The competitors for this product
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Oligopoly In a oligopoly market structure‚ there are a few interdependent firms that change their prices according to their competitors. Ex: If Coca Cola changes their price‚ Pepsi is also likely to. Characteristics: * Few interdependent firms * A few barriers to entry * Products are similar‚ but firms try to differentiate them * There is branding and advertising * Imperfect knowledge (where customers don’t know the best price or availability) Revenue Curves Total Revenue
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1. Introduction In an article published on its website on 8 June 2013‚ entitled “Airlines in Africa Not quite ready for take-off”‚ the Economist reported that in a meeting held in Cape Town‚ “IATA‚ the international airlines’ group‚ opened its annual meeting with a call for African governments to liberalise air routes and cut their often onerous taxes on fuel and tickets‚ to make the most of air travel’s ability to boost growth. “Nowhere is the potential for aviation greater than on the African continent
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Introduction Generally in business‚ there is a trade-off between selling many units at a low price and selling only a few units at a high price. There are different managerial models in a firm embodying different assumptions like the Profit Maximization Model which is a traditional model‚ the Marris Model‚ the Williamson Model and the Baumol Model. This write-up will focus on understanding management preferences in terms of price
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Short run and Long run‚ Price discrimination. Module 4 Monopolistic competition- Price and Output Decision under monopolistic competition‚ Role of selling cost Oligopoly-Price output determination under oligopoly‚ Price leadership‚ Price rigidity‚ Application of Game theory to deteremine optimal outcome under oligopolistic competition Oligopoly vs. duopoly SESSION PLAN Session Downloads Assignments LinksCase Analysis Course Objective The primary objective of this course is to develop an understanding
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Economic theory usually differentiates across the four major types of market structure: monopoly‚ oligopoly‚ monopolistic competition‚ and perfect competition. Although the list of market structures can be virtually unlimited‚ these four types are considered to be the basis for understanding the principles of market performance in different market conditions. Each of the four types of market structures possesses its benefits and drawbacks. In any of these markets‚ an entrepreneur can develop a strategy
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gain or minimize any harm to the firms. In oligopolies‚ strategic behavior is the rule. When making the decisions‚ the firms must to predict how their competitors would respond. Even when the decision is not related to price‚ strategic behavior still comes to play. In this research paper‚ real cases in Vietnam would be analyzed for purpose of understanding how oligopolistic competitors make strategic decisions in order to compete to other peers. An oligopoly is known as a market structure in which
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