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Oligopolistic firms are interdependent and large. One firm is hugely affected by the deed of the other.
Some of the characteristics of oligopoly are small number of large firms that generate substantial market control depending on the size of the businesses. Second characteristic of the oligopoly market is interdependence in decision-making process because the number of competition is few and any slight change in price or good eventually affects other firms (Nechyba, 2011). Firms in oligopoly regard the response of other firms in an industry. Thirdly, firms in an oligopolistic market normally use aggressive advertising, marketing, and promotion in order to fight for its place in the market. Advertisement and sales costs the oligopolistic firms a lot of money. Companies tend to carry out their own product’s promotion and the firm’s name to attract a significant number of customers (Landsburg, 2011).
Franchise in oligopoly market applies a small element of differentiation, which creates distinction between its own product and other competitors’ products as it aims at increasing its market share in the industry. Additionally, there is no price reduction in the oligopolistic market since prices are sticky and rigid for the reason that any price cut by one firm may eventually call for reaction by the rival firms, which may affect the whole industry (Landsburg, 2011).
Some of the competitors of the oligopolistic firms such as the franchise are the large few companies operating in the same markets. The availability and formation of cartels may threaten franchise and lead to closure of the business. Firms may further use tacit collusion by fixing the prices without all firms’ consent and when quantity produced and price fixing is done explicitly. Price leadership may largely affect the prices of the franchise especially when one major firm in the industry decides to set price lower than the prevailing market price
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This control may be the control of the competition and also the pricing issues. Mostly, the government does this regulation through the regulatory agencies and put in place laws that will centrally plan an economy or reduce the possibilities of market failure.
Economic efficiency is a relative term; any economy will be more efficient once it manufactures more products and provides more services for society than another by using the same or lower input (Bresnahan 1982). There are two models for market structure namely Perfect Competition and Monopoly markets.
This paper outlines the reasons, why both, economists and public, share their common dislike of monopoly. At given point in time and at level of production, perfectly competitive markets are highly likely to be much more efficient that monopoly markets. Governments should follow an indirect and implicit policy to break monopolies.
Most common barriers to entry include exclusive rights, and economies of scale where exclusive rights comprises legally granted property rights to produce or distribute products or services and economies of scale is the ability of a firm to produce in large scale therefore driving competition from the market.
This thus shows the most significant personalities of the sixteenth century living as contemporaries. In Shakespeare’s comedies, the female leading role act in authoritatively distinct ways with par success. However, these plays do not discourse exactly the role of women royalty.
The author states that another characteristic showing that the smartphones fall into the monopolistic competition category is the use of brand name by each company to name the product. According to the author, monopolistic competition is favoured by the strict laws governing the brand names of the products.
In three years time the patent on the “Neutron” expires and another competitor enters the market making the market an Oligopoly. After a few years, since Quaser faces Monopolistic competition, it has to change its pricing and marketing strategies as there are more competitors and less possibilities of controlling the price
If this is the case, would you still give your stamp of approval on competition
Competition is what keeps the market move at such a volatile pace. There will always be a winner and a loser in a competitive environment. There are many agencies, however, like the Competition Commission of the United Kingdom and other competition watchdogs of the European Union that very hard to ensure competition within UK fair and square.
In business, competition grows more forceful and severe in every year, ranging from competitors that venture globally to capture newer markets, online contestants looking for low-cost methods to establish
According to Pihlstrom, ontology deals with the determination of whether various categories of being are fundamental in addition to seeking the sense in which categories of being are said to be1. People know reality through the study of knowledge and understanding. Philosophers
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