Are Oligopolies Good for British Consumers?

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Are Oligopolies good for British consumers? Introduction: Oligopoly has been derived from Greek implying "few sellers". According to Sloman & Sutcliffe (2001) oligopolies are a type of imperfect market wherein a few firms share a huge proportion of the industry. Therefore industries such as oligopolies have dominance of small number of manufacturers which may produce either differentiated or almost similar products. Nevertheless there are differences between perfect oligopolies and imperfect oligopolies. While perfect oligopolies are characterized by firms that produce almost identical products like tea or CDs, imperfect oligopolies differentiate themselves through niche products such as motor cars and aircrafts. Oligopolies are marked by interdependence of firms operating in the market which either collude or compete among themselves. In collusion, firms consent to avoid competition amongst them. A formal collusion is a cartel wherein firms act like a monopolist and earn maximum profits. (Wellmann, 2004, pp: 1-2) The Oligopolist Tradeoff--Cooperation and Self-interest: An important aspect to be pondered is the tradeoff amongst the oligopolies between cooperation and self-interest. On the whole it would always be better for the oligopolists if they cooperate amongst themselves and reach the monopoly situation. But as they further their self-interest, they fail to attain the monopoly situation and maximizing their mutual profit. Every ologopolist is lured to hike
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