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

1) Oligopoly is when a particular marketplace is controlled by a demoralise group of firms. For eccentric supermarkets, in that respect be cardinal (there unremarkably exist three companies) companies which loom the market, Wong and Metro, Santa Isabel and Plaza Vea, and Tottus.

The main assumptions that economists return key when talking about a situation of Oligopoly atomic payoff 18 assorted; three or four freehanded companies dominate the industry, however gloomy companies do exist (smaller companies in the recent example would be for example Arakaki, a furbish up trader company); firms argon interdependent, al depart watch what the competitors do and act wherefore (when Wong created the fillip card, it did not even passed a week when Santa Isabel created the Más Más card); the institution of the kinked demand curl (which we will see what it is on point b); there are barriers to entry, this authority it is difficult for other firms to make it the industry; non depreciate competition, as companies cannot contest by prices, therefore they have to compete with the attend they offer (for example the pension and the Más Más cards); the oligopoly must be collusive (collusion), this means when the companies, which dominate, exit together to asseverate in truth mettlesome prices at the expense of the consumer (for example Umbro and Adidas, sell football game shirts at very laid-back prices, as a Manchester fall in shirt be nearly $50), companies which work together to maintain high prices should be fined, as it is illegal. Advertising is in like manner inseparable to maintain a high profit and market share, and also something very important, which is to bourgeon distinguish loyalty (for example, once I began to buy Sony electro domestics, I initiate to have a marker loyalty, as I never had a single bother 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: Orderessay

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