Oligopolistic Market Structure - Term Paper Example

It proves that the effects of market structure are persistent in the long run. The level of competition in pricing and output decisions under an Oligopolistic Market Structure The need to evaluate the empirically Structure-Conduct-Performance between concentration and profitability has been a process requirement in establishing factual data to overcome the endogenous problem of market structure and expand on the traditional business analysis in several ways.... Oligarchy becomes a full competition scenario leading to implausibly high market shares, resulting in Oligopolistic Market Structure....

orizontal and Vertical MergerDominant firms in the market practice such strategies that encourage development of an Oligopolistic Market Structure.... Mergers are the most common way to develop this structure.... Then it goes on to answer the questions of a perfectly competitive market.... Then it goes on to answer the questions of a perfectly competitive market.... Finally it presents facts which prove that horizontal mergers increase the concentration ratio in the market....

This signifies that beer production is a market in Australia which is largely an oligopolistic structure with few large players controlling the supplies.... However, recently, the… From the workers' perspective, this can be catastrophic for the producer of Tooheys, which controls about 50% of the market supply. Lion Nathan, the parent company which is facing this strike, Their portfolio ‘also includes some of the nation's fastest growing beer brands, such as Hahn Super Dry and Boag's Draught, and the leading light beer, Hahn Premium Light' (Lion Nathan 2010)....

This means that, by definition, an Oligopolistic Market Structure is a market failure Why is competition good?... This paper outlines the role of competition, oligopoly and unique challenges of management in an oligopolistic market.... An oligopolistic market is one where a collection of large firms own a lot of the market (Lecture Slides 7-9).... This assignment describes the market theory and its base on some assumptions....

Dutta and Radner (199) argue that a change in price in an Oligopolistic Market Structure will lead to an equivalent change by other firms in the same direction above the kinked demand curve.... Kreps (1990) point out that in a competitive market, if the price is greater than the average variable cost, the firm should continue producing and if the price is less than the average variable cost then the firm should shutdown at the point where price is equal to average variable cost....

This would be done by evaluating the economic aspects of this sector like the market structure, the price and demand elasticity, the present condition of the sector, the entry barriers and common strategies, the areas of the sector that need immediate interference and change and the propose reforms as suggested by the OFGEM.... These factors are identified to be hazardous for the future sustainability and health of the market structure because a significant lack of competition among the enmities in the market, a lack of interest and engagement of the consumers and excessive control of a handful of energy suppliers are noted in this sector....

rofit Maximisation in Oligopoly MarketAn Oligopolistic Market Structure is characterised by few but large firms in the market.... In making their economic decisions, firms in this market structure consider the behaviour of other firms in the market.... The diagram below illustrates the profit maximisation in an oligopoly market structure.... In an oligopolistic market, profits will be maximised at the point where the price p intersects with the marginal revenue and the marginal cost curves (Baumol and Blinder, 2012)....

But, in the Oligopolistic Market Structure, the cost of entry is very high and thus, there is a first-mover advantage, thus enabling such players to have some controlling power over the market.... Barriers to EntryA monopolistic competition market structure is characterized by a large number of sellers, engaged in selling differentiated products.... Contestable Market Versus Price Leadership Strategy Monopolistic market structure is characterized by a large number of players and thus, each of them has very little influence over the price structure of their products....