Oligopolistic Companies and How They Compete

1) An Oligopolistic market structure is a structure where very few large businesses sell a particular standard Good or differentiated Good, and to whose market entry proves difficult. This in turn, gives little control over product pricing because of mutual interdependence (with the exception of collusion among businesses) creating a non-price competition meaning they are the ‘price setters’. A good rule to help classify an

Oligopolies are a type of market structure evident in Australia, which is comprised of 2 or more firms having a significant share of the market. In an oligopoly the few firms sell similar but differentiated or homogenous products and is characterised by a large number of buyers making it a form of imperfect competition. This market structure is evident through the Big Four Banks, Phone Industry - Vodafone, Optus and Telstra.

Oligopolies have been around ever since there is trade. However, it has only recently gained grounds in this age of globalisation. Never before has oligopolistic competition been so fiercely contested across so many industries.

Monopolistic competition and Oligopoly are considered imperfectly competitive markets that are a result of few to many firms offering differentiated products. Differentiation of products impede substitution, which allow producers to earn higher than normal profits and thereby enhance shareholder wealth (Byrd, J., Hickman, K., & McPherson, M., 2013). Oligopolies are highly interdependent, with actions of one firm will resulting in a reaction from another. The interdependence results in higher efficiency as a necessity to compete with rivals. According to Claessens "greater development, lower costs, enhanced efficiency and a greater and wider supply resulting from competition will lead to greater [financial] access (2009).

The oligopoly theory is based on the importance of the number of firms in an industry as well as on the nature of a product. In oligopoly, the more similar or homogenous product of different firms is, the greater is awareness of the competitors. In all oligopolistic markets several sellers represent a substantial proportion of total sales. The fewness of the firms is a key characteristic of oligopoly. As a result of the limited amount of companies in the oligopoly industry, the main problem is hidden in the recognition of mutual dependence or interdependence of companies (Lipczynski et al.,

Oligopoly is defined as a market structure in which there are a few major firms dominating the market in an industry. One of the defining factors is that each firm explicitly feeds off of the competitors' moves and their potential responses in regard to setting prices, launching new products, etc. Under this model there is a level of implied cooperation. The firms understand that it is in their own best interests to maintain a stable price. If one of the firms subsequently lowers their prices, their competitors will do the same and knock out any advantage the original firm was hoping to gain with lower prices. However, if they raise their prices, the competitors may not do the same and can keep their prices fixed which will allow them to gain more market share.

Oligopolies stand distinctively different than other competitive markets in that they have a smaller impact area in price, output, etc. For example, an oligopoly would be a convenience store in an insignificant settlement competing against other convenience stores in the area. Moreover, organizations in oligopolistic market structures watch each other closely to ensure the other organization doesn’t upset the delicate balance of the current market. Additionally, organizations in oligopolistic market structures remain highly unstable and subsist prone to retaliation if provoked. Alternatively, a learning point to Oligopolistic market structures remains, one should avoid becoming so unique in ones’ organization as to make oneself a

A. Competitive factors which have four basic (related to what holds something together and makes it strong) forms of competition: total/totally/with nothing else mixed in competition in which every company has the same product in whose office is more conveniently located or who offers extended hours needed by the patient. Second is (related to one company having too much power) competition in which many sellers compete and have substitutable products when for example many of the community doctors participate on the panel of both competing plans and the small price changes might lead to a (related to people who use a product or service) move/change from one plan to the other. Third position is oligopoly where a few companies control a majority of the industry sales. The final is (one company that controls too

An oligopoly describes a market situation in which there are limited or few sellers. Each seller knows that the other seller or sellers will react to its changes in prices and also quantities. This can cause a type of chain reaction in a market situation. In the world market there are oligopolies in steel production, automobiles, semi-conductor manufacturing, cigarettes, cereals, and also in telecommunications.

Parkin says that oligopoly, like monopolistic competition, lies between perfect competition and monopoly. In the diamond trade, the firms in oligopoly produce the same product and compete only on price. Oligopoly is a structure in which only a small number of firms compete (Parkin, 2010).

Oligopoly Oligopoly is a market structure in which the number of sellers is small. Oligopoly requires strategic thinking, unlike perfect competition, monopoly, and monopolistic competition. • Under perfect competition, monopoly, and monopolistic competition, a seller faces a well defined demand curve for its output, and should choose the quantity where MR=MC. The seller does not worry about how other sellers will react, because either the seller is negligibly small, or already a monopoly. Under oligopoly, a seller is big enough to affect the market. You must respond to your rivals’ choices, but your rivals are responding to your choices.

•Oligopoly: This is an industry with very little firms in the market. If they conspire, they weaken output and raise profits the way a monopoly would and should do. For example the mobile phone industry is an oligopoly what with so many companies for example Apple, LG and Samsung all competing together. Supermarkets are oligopoly’s as they make supernormal profits as well.

The assignment for this week was to review the video which discusses the four types of markets: perfect competition, monopolistic competition, oligopoly, and monopoly. In order to review this effectively there must be an understanding of the terms. According to our text, perfect competition involves products competing clients and that they offer corporations less potential profits than imperfectly competitive markets do. (Bryd, Hickman and McPheson, ) The text also referenced imperfect competition and this is when entry is restricted or goods are differentiated. (Bryd, Hickman and McPheson, ) Monopolistic competition, oligopoly, and monopoly according to research are deemed as imperfect competition. Monopolistic competition is considered imperfect because there are a lot of producers sell products that are distinquished from each other and there are not feasible substitutes. The oligopoly is a when there are many small companied that take up a large part of the market share. It is close to a monopoly but it is more than one company. A monopoly is normally one company that controls almost all of the market.

A monopolistic competition describes a common market structure in which firms have many competitors or sellers, but each one sells a vaguely distinctive product or service. One of this market structure’s characteristics is that each individual firm makes independent decisions about price and output, based on its product, its market, and its costs of production (Economics Online, 2015). Another characteristic is there is freedom to enter or leave the market, since there are no major barriers to entry or exit. The opposite of this market structure is an oligopoly. Oligopoly means few sellers. Oligopoly is the market structure in which there are only a few firms or a few firms dominate the market (Amacher & Pate, 2013). In an oligopolistic market, each seller supplies a large portion of all the products sold in the marketplace. In addition, because the cost of starting a business in an oligopolistic industry is usually high, the number of firms entering it is low.

Since a cartel acts as an imperfectly competitive market, it is best to define it as having a direct relationship with an oligopoly industry. In Oligopoly markets, few numbers of sellers are joined together to form a market or an industry. Usually consisting of 2 or 20 firms, their main goal is to sell and produce differentiated products and services. With decisions influenced by one another, the price of the product and the quantity of production is fixed in accordance with its member 's own self-interest and self-respect. The interdependence of firms in oligopoly markets is demonstrated in the obligation to maintain price stability shown by popular demand. It may lead firms