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

1) Oligopoly is when a particular food market is controlled by a alter group of firms. For eccentric supermarkets, thither be iii (there ordinarily exist three companies) companies which govern the market, Wong and Metro, Santa Isabel and Plaza Vea, and Tottus.

The main assumptions that economists deport when talking about a situation of Oligopoly atomic come 18 assorted; three or four largish companies dominate the industry, however lessened companies do exist (smaller companies in the recent example would be for example Arakaki, a fillet of sole trader company); firms are interdependent, al allow for watch what the competitors do and act wherefore (when Wong created the allowance card, it did not even passed a week when Santa Isabel created the Más Más card); the universe of the kinked demand curl (which we will see what it is on dubiety b); there are barriers to entry, this performer it is difficult for other firms to reckon the industry; non outlay competition, as companies cannot contest by prices, and then they have to compete with the military service they offer (for example the inducement and the Más Más cards); the oligopoly must be collusive (collusion), this means when the companies, which dominate, name together to check actually towering prices at the expense of the consumer (for example Umbro and Adidas, sell football shirts at very high gear prices, as a Manchester get together shirt be well-nigh $50), companies which work together to maintain high prices should be fined, as it is illegal. Advertising is to a fault inherent to maintain a high profit and market share, and also something very important, which is to bourgeon tell on loyalty (for example, once I began to buy Sony electro domestics, I bring to have a grunge loyalty, as I never had a single puzzle 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: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper